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Tag: for-profit education

  • Nurses are in high demand but nursing schools struggle tp provide enough slots to train them 

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    LOS ANGELES — Oscar Mateo dreamed of being an artist, but after he got leukemia when he was 20, his life plans abruptly changed. The compassionate nursing care he received while hospitalized touched him so much that he decided he wanted to provide the same for others.

    That impulse led him to the registered nursing program at Mt. San Antonio College in the Los Angeles County suburb of Walnut. But getting there wasn’t easy, as he had to battle competition for limited seats in one of the highest-demand fields in higher education, a career offering purpose, plentiful jobs and potentially six-figure paychecks. 

    Mateo was rejected three times by Mt. SAC before winning admission. To burnish his resume and win a coveted seat, he earned certification as a nursing assistant and got work experience.

    “It’s so competitive and stressful,” Mateo, now 30, said. “It definitely takes a toll on yourself.”

    Mateo represents a paradox bedeviling the U.S. nursing landscape. There is enormous demand for nurses, as retirement or burnout push many from the field. Despite tens of thousands of students fighting to get into nursing programs, schools can’t accommodate that demand, for two major reasons: They can’t find enough faculty to teach classes and there is a dearth of the required hands-on training opportunities in hospitals and health care facilities.

    The mismatch has hit California particularly hard, triggering a state audit, legislative proposals and funding initiatives. Some nursing schools want to allow greater use of training technology to widen access — such as high-tech mannequins that simulate heart attacks and other medical conditions. Others warn against that path. In the process, tensions between public and private nursing schools have flared as they battle for resources to expand their programs.

    Mt. San Antonio College, in Los Angeles County. More than half of California’s nursing school programs reported their requests for clinical placements in hospitals were denied in 2022-23. Mt. SAC lost placements at several sites, including two spots that were withdrawn right before classes started. Credit: James Bernal for The Hechinger Report

    “The demand is so high but there just aren’t enough seats,” said Paul Creason, Long Beach City College dean of business, education and health sciences. “It’s critical to supply the workforce to meet the need, but there are too many obstacles and this will have ramifications for the cost and quality of health care.” 

    In California, only about a third of 57,987 applications by qualified applicants to nursing school were accepted in 2022-23, the most recent data available, according to the state Board of Registered Nursing. Nationwide, nursing schools turned away nearly 66,000 qualified applications for bachelor’s and graduate nursing programs in 2023, the American Association of Colleges of Nursing reported. 

    Related: Interested in more news about colleges and universities? Subscribe to our free biweekly higher education newsletter.

    California’s projected shortfall of working nurses is one of the largest in the nation, estimated to grow from 40,790 this year to 61,490 in 2035, according to the U.S. Department of Health and Human Services. Shortages are projected for both registered nurses, who provide the more advanced health care skills typically acquired in a two- to four-year training program, and licensed vocational nurses, who offer more basic care after certification that usually takes one year to complete. 

    The most contested resource in nursing education is the hands-on clinical training required. 

    “You have to have these spots or your program is dead in the water,” Creason said. 

    California law requires students to complete at least 500 hours of direct patient care under the supervision of nursing staff at a hospital or other health care facility to graduate and qualify to take the national licensing exam. Without that, students can’t finish their degrees and schools can’t increase enrollment. 

    So the competition for clinical placements is fierce. Requests are soaring just as some hospitals are scaling back on training because their staff nurses are too overloaded to take on more students. More than half of the state’s nursing school programs reported their requests for clinical placements were denied in 2022-23, according to the state nursing board, and 57.2 percent of the state’s 152 registered nursing programs cited a lack of clinical placements as the top obstacle to adding more seats.

    Mt. SAC, for instance, lost placements at several sites — one of them fell from 10 to six. This past semester, a hospital withdrew two spots just weeks before classes started, forcing the school to scramble for a replacement. San Antonio Regional Hospital stepped in, opening a night shift for students. 

    Andrew Santana instructs students on how to do an APGAR assessment on a simulated newborn baby at Mt. San Antonio College campus. Credit: James Bernal for The Hechinger Report

    Public campuses argue that their students should have priority for these clinical slots. Private nursing schools — both nonprofit and for-profit — disagree, urging a level playing field.

    Reports that some colleges pay for the sought-after slots have riled many campuses, and in the 2022-23 state survey, nine unnamed colleges reported they had provided “financial support” to secure a clinical placement. A 2023 state law now bans such “pay to play” schemes — but college officials say it is difficult to enforce and unclear as to what it covers. Are donations to a hospital’s foundation, for instance, prohibited? What about tuition assistance to nurses who agree to serve as instructors for that college’s students?

    With resources tight, state legislators and nursing organizations have begun rallying to better support public nursing programs.

    Last year, Gov. Gavin Newsom and the Legislature approved $60 million for a five-year grant program to expand community college nursing programs, including partnerships with four-year campuses for bachelor’s degrees. Beginning this year, another state law mandates health facilities to “work in good faith” with California community colleges and California State University campuses to meet their clinical placement needs.

    Related: How one college is tackling the rural nursing shortage 

    Private institutions criticize those efforts as unfair. Samuel Merritt University, a private nonprofit in Oakland, petitioned the state board to add 72 seats to the nursing program at its Sacramento campus, but Cal State Sacramento, Sacramento City College and Sierra College told the board they opposed the request because they were losing clinical sites and worried about nurse burnout from training students. The state board approved the 72-seat increase, in August, after the university found clinical placements outside the immediate Sacramento area.

    “What we find to be the most frustrating is the state schools, the four-year institutions and the two-year institutions, they’re kind of banding together to prevent any growth by the private schools,” said Steven Rush, dean of Samuel Merritt’s college of nursing.

    Creason, of Long Beach City College, argues that community colleges should get priority for state funding and clinical placements because they deliver quality nursing education at a significantly lower cost than private programs, and typically to students who reflect the state’s cultural and linguistic diversity. 

    California nurses’ organizations agree, saying that community colleges and CSU campuses in particular offer a pipeline to nursing jobs for lower-income, first-generation students of color and that these graduates provide culturally sensitive care.  

    Creason said the total cost for an LBCC two-year associate degree in nursing – the college’s most popular major along with business – is about $5,000. Under a newly established partnership with Cal State Long Beach to jointly prepare students for a four-year bachelor’s degree in nursing, the total cost would be about $43,000, he said. 

    That compares with $148,000 for a four-year bachelor’s degree at West Coast University — a private, for-profit institution that runs the state’s largest nursing program, with campuses in Los Angeles, Orange County and the Inland Empire.

    But the more affordable public nursing programs are also far more difficult to get into. Long Beach’s admission rate is about 3.3 percent, with room for 80 students among 2,400 applicants each year, although the partnership with Cal State Long Beach will allow it to grow to 120 seats in about two years, Creason said. 

    West Coast, by contrast, has a 100 percent admission rate and an annual approved enrollment of 2,880 seats

    That ease of entry is why Oscar Mateo was close to enrolling at West Coast before finally winning admission to Mt. SAC on his fourth try. He said he would have needed to take out a loan of more than $100,000 to afford West Coast but was so driven to become a nurse he would have been willing to make that investment. He was ecstatic when he got his financial aid letter and saw that state grants and fee waivers would cover the entire cost of his nursing program aside from books. 

    “I was so happy. I couldn’t believe it,” he said. “Once I was in Mt. SAC, it was a no-brainer to go to a community college. The low cost made it so enticing and the respect the school has from the hospitals are big reasons for attending this program over others.”

    Student Diva Bailey using a virtual reality headset to do a psych evaluation of a simulated patient at Mt. San Antonio College campus. The technology, which is used in many states, allows nursing students to practice diagnosing and treating medical conditions in a low-stakes environment. Credit: James Bernal for The Hechinger Report

    For Ray Ayranian, the heftier tuition and fees at American Career College, a private, for-profit institution, are worth it. Ayranian, who was inspired to pursue nursing after seeing the care given his sister when she underwent neurosurgery, started out at Pasadena City College. But he said he wasn’t a great student and thought the private-school route would be easier — and faster. He and his parents took out a loan for about $30,000 to pay for the 12-month licensed vocational nurse program, he said, and he plans to pay off the debt by working extra shifts once he earns his degree and gets a job. 

    “I just wanted to do something fast because I’m a pretty hands-on person,” he said.

    Representatives for ACC and West Coast declined to comment. 

    One potential solution to ease the crunch is state financial incentives to hospitals and other medical facilities to provide more clinical placement slots. Virginia offers tax-free grants to nurses and other health professionals who mentor nursing students, while Georgia, Maryland, Colorado, South Carolina and Alabama are among states that offer tax credits or other financial incentives. Federal legislation to give a $2,000 tax credit to nurses who provide at least 200 hours of clinical training is pending.

    Another idea is expanding the use of technology. At Mt. SAC, for instance, classrooms have high-tech mannequins that can be programmed to blink, shriek and simulate a variety of medical conditions, including heart attacks, bleeding, respiratory failure — even giving birth. Virtual and augmented reality programs offer interactive 3D environments with animation or actors simulating patients. The technology, which is used in many states, allows nursing students to practice diagnosing and treating medical conditions in a low-stakes environment. 

    Given the shortage of clinical placements, some nursing educators argue that accredited programs with high student licensing exam pass rates should be allowed to balance simulation training with hands-on training, rather than meet the state’s minimum 500-hour requirement. 

    Michelle Mahon of the National Nurses United union says better working conditions for nurses would draw back more of those who got burned out and left the field. That, she said, would help ease the pressure to create more nursing school seats. 

    Related: To fill seats, more colleges offer credit for life experience 

    At Mt. SAC this summer, a group of students doing simulation training was directed to examine a mannequin that was simulating a 72-year-old woman who had undergone gall bladder surgery and returned home. The mannequin, nicknamed Apollo and made of silicon, synthetic plastic polymer and other materials, sported hard legs but a soft, rubbery feel to most of the rest of the body. 

    The clinical instructor, Maria Stefanidis from nearby San Antonio Regional Hospital, assumed the voice of “Mrs. Smith,” complaining of nausea and sharp pain in her abdominal area.

    Paul Song, playing the role of a home health nurse, checked the mannequin’s blood pressure, heart rate, temperature and respiration – all computer programmed. Stefanidis reminded him to assess the incision area for redness and warmth, a potential sign of infection, and guided him on the proper way to check for abdominal sounds. He told Stefanidis he suspected a blockage in the intestines and possible infection because of the elevated vital signs.

    “Good assessment,” Stefanidis said. “So what are we going to do about that?”

    “The best course of action would be to call the doctor and let him know,” Song said. 

    Andrew Santana (left) instructing students in performing a simulated delivery of a baby at Mt. San Antonio College campus. Credit: James Bernal for The Hechinger Report

    Andrew Santana, Mt. SAC’s Simulation Lab specialist and instructor, said the campus plans to expand its technology offerings with a new health careers building and advancements such as mannequins programmed with artificial intelligence that are able to spontaneously converse with students.

    Eileen Fry-Bowers, dean of nursing at the private nonprofit University of San Francisco, is among those who believe that accredited programs with high student licensing exam pass rates should have more flexibility in balancing simulation and hands-on training. No evidence supports the state’s requirement of 500 hours of direct patient care as a threshold for positive patient outcomes, she said. 

    “This idea that direct care is the be-all and end-all of clinical education is not supported by research,” she said. 

    Others say technology can never replace the human-to-human connection. Nicole Ong, a Mt. SAC nursing student who worked as a certified nursing assistant before starting her RN program, said experience with real people is crucial for learning how to bond with patients in their most vulnerable moments.

    “You have to get trust from a patient and you can’t get that from a mannequin,” Ong said.

    Contact editor Lawrie Mifflin at (212) 678-4078 or mifflin@hechingerreport.org.

    This story about nursing school shortages was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger higher education newsletter

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Teresa Watanabe

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  • Cosmetology schools and other certificate programs got exemption from rules on graduates’ earning levels

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    Remiah Ward’s shift at the SmartStyle salon inside Walmart was almost over, and she’d barely made $30 in tips from the haircuts she’d done that day. It wasn’t unusual — a year after her graduation from beauty school, tips plus minimum wage weren’t enough to cover her rent.

    She scarcely had time to eat and sleep before she had to drive back to the same Walmart in central Florida to stock shelves on the night shift. That job paid $14 an hour, but it meant she sometimes spent 18 hours a day in the same building. She worked six days a week but still struggled to catch up on bills and sleep. 

    The admissions officer at the American Institute of Beauty, where she enrolled straight out of high school, had sold her on a different dream. She would easily earn enough to pay back the $10,000 she borrowed to attend, she said she was told. Ward had no way of knowing that stylists from her school earn $20,200 a year, on average, four years after graduating. Seven years later, her debt, plus interest, is still unpaid.

    In July, Republicans in Congress pushed through policies aimed at ensuring that what happened to Ward wouldn’t happen to other Americans on the government’s dime; colleges whose graduates don’t earn at least as much as someone with a high school diploma will now risk losing access to federal student loans. But one group managed to slip through the cracks — thousands of schools like the American Institute of Beauty were exempt. 

    Remiah Ward worked two jobs while trying to make it as a hair stylist but never made enough to pay her all her bills and has had to put her dream career on hold. Credit: Courtesy Remiah Ward

    Certificate schools succeeded in getting a carve-out. The industry breathed a collective sigh of relief, and with good reason. At least 1,280 certificate-granting programs, which enrolled more than 220,000 students, would have been at risk of losing federal student loan funding if they had been included in the bill, according to a Hechinger Report analysis of federal data. [See table.] About 80% of those are for-profit programs, and 45 percent are cosmetology schools.

    “There is this very strange donut hole in accountability where workforce programs are held accountable, two-year degree programs are held accountable, but everything in between gets off without any accountability,” said Preston Cooper, a senior fellow at the conservative think tank American Enterprise Institute.

    The schools spared are known as certificate programs and, with their promise of an affordable and relatively quick path to economic security, are the fastest growing part of higher education. They usually take about a year to complete and train people to be hair-stylists, welders, medical assistants and cooks, among other jobs.

    As with traditional colleges, there are big differences in quality among certificate programs. Some hair stylists can make a middle-class living if they work in a busy salon. But for people who have to pay back hefty student loans, the low wages for stylists in the early years can be an insurmountable obstacle.

    Ward found herself facing that dilemma. When she could no longer sustain the lack of sleep from her double shifts at Walmart, she pressed pause on her styling career and took a job with Amazon, loading and unloading planes. She wasn’t ready to give up her dream career, though, so in addition to her 10-hour days moving boxes, she took part-time gigs at local hair salons. She didn’t have family to help pay rent, not to mention loan payments, so she couldn’t afford to work fulltime at a salon, which is essential to build up a regular clientele — and bigger tips. Without that, she couldn’t get much beyond minimum wage. 

    A representative from the American Institute of Beauty denied that Ward was told she would easily repay her loan.

    “No admissions representative, not at AIB or elsewhere, would ever make such a statement,” Denise Herman, general counsel and assistant vice president of AIB, said in an email. 

    The high cost of many for-profit cosmetology schools — tuition can be upward of $20,000, usually for a one-year program  — can leave former students mired in debt. In May, the government released data showing 850 colleges where at least a third of borrowers haven’t made a loan payment for 90 days or more, putting them on track to default. About 42 percent of those were for-profit cosmetology and barbering schools (including AIB).

    Brittany Mcnew says she loves working as a stylist but that her income takes a hit when traffic is slow in her salon in Bethlehem, Pennsylvania. Credit: Meredith Kolodner/The Hechinger Report

    Herman blamed the Biden administration policy that after the pandemic let borrowers forgo payments without any penalty.

    “Debtors became ‘comfortable’ not making payments,” said Herman. “AIB provides the graduate with the information graduates need to make their payments. What that graduate decides to pay, or not pay, is not influenced by AIB.”

    Under the “big beautiful bill” passed in July, two- and four-year colleges must ensure that, after four years, graduates on average make at least as much as someone in their state who has only a high school diploma. The colleges must inform students if they fail that test, and if it happens for two out of three years, the college will be ineligible to receive federal loan funds.

    Some for-profit certificate schools lobbied hard for an exemption. The American Association of Career Schools, which represents proprietary cosmetology schools, spent $120,000 lobbying the Education Department and Congress, including on the “big beautiful bill,” in the first six months of this year. At the group’s major lobbying event in April, Sen. Bill Cassidy, chairman of the Senate Health, Education, Labor and Pensions Committee, was the keynote speaker.

    Cassidy declined to answer questions about why certificate programs were excluded, but a fact sheet from his committee noted that they are already covered by something else, the gainful employment rule, which is also being challenged by the for-profit cosmetology industry.

    That federal gainful employment regulation, updated in 2023, requires in essence that graduates from career-oriented schools earn enough to be able to pay back their loans and earn more than a high school graduate. It also requires that consumers, like Ward, be given more information about how graduates from all colleges fare in the workplace.

    The rule posed an existential threat to a huge swath of cosmetology schools.

    In 2023, the American Association of Career Schools sued to block the gainful employment rule. 

    “AACS supports fair and reasonable accountability measures,” Cecil Kidd, the AACS’s executive director, said in an email. “However, we strongly object to arbitrary or discriminatory policies such as the US Department of Education’s Gainful Employment rule, which unfairly targets career schools while exempting many public and private non-profit institutions that fail to meet comparable outcomes.”

    He pointed to public comments in which AACS has argued that the rule imposes an unfair burden on cosmetology schools since stylists are predominantly women, who are more likely to have “personal commitments” that affect their earnings, and who rely on tips that are often pocketed as unreported income.

    Cameron Vandenboom is a successful hair stylist but says the high cost of her private beauty school wasn’t worth thousands of dollars in student debt: “I absolutely should have gone to community college.” Credit: Courtesy Shanna Kaye Photo

    In a twist that surprised advocates on both sides, the Education Department in May asked the court to effectively dismiss AACS’ lawsuit. 

    If the court rules in favor of the cosmetology schools, certificate programs will be free of all accountability requirements on their graduates’ earning levels, because they got the carveout in July. 

    Even if the court rules against cosmetology schools, advocates are pessimistic that the Trump administration will implement the gainful rules. The first Trump administration got rid of the original rules back in 2019 and Nicholas Kent, now the U.S. undersecretary of education, was previously the chief policy officer for Career Education Colleges and Universities, or CECU, the trade group that represents for-profit colleges, including certificate programs. He is a well-known critic of the rule.

    “I would be very surprised, if the unlikely scenario plays out that the Biden rule is upheld, that this Department of Education would just say, OK, the court has spoken,” said Jason Altmire, CECU’s executive director. “We are not opposed to accountability for certificate programs, so long as it’s fair to everybody and we have a voice in how you’re measuring programs.”  

    Altmire said CECU didn’t lobby for certificate programs to be carved out of Congress’ bill, but did argue against the earnings formula that Congress landed on. Altmire said it doesn’t take into account part-time work and the gender gap in wages.

    One objection from AACS, raised by CECU as well, is that the earnings measured don’t include tips, which are crucial to hair stylists’ income. Analyzed without including tips, 576 of 724 cosmetology schools in the Hechinger Report analysis would fail Congress’ earnings test. But even if tips were included and raised stylists’ income by 20 percent, 526 cosmetology schools would still fail.

    Earlier this year, Remiah Ward made the difficult decision to leave Florida and move to Kentucky, where the cost of living was more forgiving. She’s working from 7 p.m. to 7 a.m. at an aluminum factory for $19.50 an hour. 

    One day, she might go back to styling after her debt is paid off. Like many former beauty school students, she wishes she’d had more information when she decided to enroll.

    “They really sugar-coated it. I was 18 years old, and I needed a trade that I was already pretty good at,” said Ward, who is now 26. “Everybody thinks they’re going to make a high return, and it’s just not the reality.”

    Marina Villeneuve contributed data analysis to this story. 

    This story about cosmetology schools produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger higher-education newsletter.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Meredith Kolodner

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  • Explore the earnings for graduates of beauty schools, other certificate programs

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    Schools that train hairstylists, dental assistants and health aides will be able to keep getting federal student loan dollars even if the professionals they turn out don’t end up earning any more than a high school graduate.

    That’s because programs like those, which don’t end in a college degree, were granted an exemption from new accountability measures under President Donald Trump’s ”big, beautiful bill.” 

    A Hechinger Report analysis of federal data found at least 1,280 such certificate programs could have been at risk of their students losing access to federal student loans — but a successful lobbying effort excluded them from the accountability measures. 

    Related: Become a lifelong learner. Subscribe to our free weekly newsletter featuring the most important stories in education. 

    Under the new law, most graduates of associate, bachelor’s and graduate degree programs must earn at least as much as someone who has only a high school diploma. If programs fail to hit that benchmark for two out of three years, their students will no longer be eligible for federal student loans. (And the schools must warn students of this possibility if they miss the mark for just one year). Without that borrowing power, many students could not afford to attend. And without those students, some of the schools might not survive. 

    Using the table below, see which certificate programs might have been flagged under the Trump law if not for the exemption. If graduates of a particular program ended up earning less than adults with only a high school diploma, that program could have faced losing eligibility for federal student loans under the Trump law.

    Methodology

    What exactly does the “big, beautiful bill” call for?

    The legislation requires the Department of Education to compare earnings of working adults who have only a high school diploma to the earnings of adults four years after they complete a degree program or graduate certificate. If a postsecondary program’s graduates fail to outearn adults with only high school degrees for two out of three years, students can no longer obtain federal student loans to attend that program. 

    The law also sets up an appeals process and a way for programs to apply to regain eligibility for federal student loans.

    What data was analyzed? 

    The law directs the education secretary to use census data to calculate median earnings for working adults with only a high school degree in the state where a program is located. The Department of Education will release regulations that spell out exactly how to do that math. For example, the law does not spell out whether it will look at census data averaged out over 12 months or a longer period of time. 

    For earnings data for high school graduates, The Hechinger Report relied on calculations from the Department of Education, which were derived from the 2022 American Community Survey 5-Year Estimates Public Use Microdata Sample from the U.S. Census Bureau.

    To calculate median earnings for graduates, the law directs the Education Department to put together earnings data for a cohort of at least 30 graduates who received federal student aid for postsecondary education — which typically includes grants, loans or work-study. Graduates are excluded if they’re currently enrolled in another higher education program. If there are fewer than 30 students in a cohort, the Education Department can lump together several years of data to get to 30 students.

    To get earnings data for graduates of certificate programs, Hechinger used a federal database known as College Scorecard. We downloaded field of study data for the 2022-23 school year. From this data, The Hechinger Report extracted information about certificate programs, at their main campuses, and included only programs that had median earnings data. The federal database suppresses earnings data for small programs. That left 4,431 currently operating certificate programs. 

    How was a program determined to be at possible risk of failing the accountability measure?

    For each program, The Hechinger Report compared median graduate earnings to the high school graduate earnings data of the state where the program was located. If the graduates earned less, the program was considered to be at risk.  

    Under the law, postsecondary programs that don’t meet the earnings benchmark for one year have to inform all current students that they are at risk of losing their eligibility for federal student loans. 

    Are there any limitations to the data? 

    The “big, beautiful bill” takes online programs into account by considering whether students live in the same state where their academic program is based. Under the law, student earnings are compared with national data rather than state data when fewer than half of enrolled students live in the state where the school is located, which may be the case for online programs. 

    The Hechinger Report’s analysis instead compares every program with state earnings. That’s because the College Scorecard field of study data set is limited and only includes information about graduates employed within the same state as the institution, not whether enrolled students live in the same state as the program. In addition, College Scorecard data provides earnings data for all graduates without a breakdown for whether they receive federal aid.

    Also, the Hechinger database looks at the available median earnings of all students four years after graduation for the school year 2022-23, regardless of the number of graduates. Though College Scorecard suppresses data on smaller programs, median earnings data is available for programs with 16 or more working graduates. The “big, beautiful bill” directs the Department of Education to instead lump together years of data to create cohorts of at least 30 students.

    Contact investigative reporter Marina Villeneuve at 212-678-3430 or villeneuve@hechingerreport.org or on Signal at mvilleneuve.78

    This story about beauty schools was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Marina Villeneuve

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  • For-profit beauty school settles class-action lawsuit – The Hechinger Report

    For-profit beauty school settles class-action lawsuit – The Hechinger Report

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    After four years battling a chain of for-profit cosmetology schools in court, and many more years struggling with debts caused by those schools, about 150 students will receive some financial relief.

    As part of a settlement finalized this week in a class action lawsuit, La’ James International College, which is based in Iowa, will pay current and former students who joined the lawsuit $1,500 each. It will also discharge debts those students owed to the school and make changes in how it communicates about financial aid.

    The suit was brought against La’ James International College in 2020 following a Hechinger Report investigation into cosmetology schools in Iowa. Our reporting showed how the business model of beauty schools can help for-profit schools rake in profits while pushing students deep into debt for an ultimately low-paying career.

    Related: Become a lifelong learner. Subscribe to our free weekly newsletter to receive our comprehensive reporting directly in your inbox.

    The lawsuit, which was brought on behalf of current and former students by the nonprofit legal and advocacy organization Student Defense, accused La’ James of delaying financial aid payments and causing them financial hardship in violation of the Iowa Consumer Fraud Act.

    “Students rely on their financial aid to stay afloat while they pursue their goals – and La’ James pulled that out from under them,” Student Defense’s litigation director, Eric Rothschild, said in a statement. “When for-profit colleges engage in such practices, hard-working students pay the price.”

    La’ James did not respond to request for comment.

    Most colleges disburse financial aid each semester, but beauty schools work differently. Students are required to clock a certain number of hours either in class or working in the school’s salon practicing their skills on paying customers. Financial aid payments are supposed to be made after students hit certain hour benchmarks, but students said La’ James often delayed those payments for months, so that they had to take out other loans to meet daily living expenses.

    Cosmetology students in Iowa must complete more hours of training than those in any other state: 2,100 hours. (Most states require 1,500 hours.) Many for-profit beauty schools in Iowa have fought fiercely to keep it this way, lobbying hard against proposed changes. The state cosmetology school association has also protected its monopoly in this educational market, suing a community college that wanted to open a cosmetology program in 2005.

    Related: Tangled up in debt

    Many Iowa cosmetologists told Hechinger reporters that they spent a significant portion of their clock hours sitting around waiting for customers, not learning or practicing anything.

    A Hechinger analysis showed that the more time a state requires for cosmetology training, the more debt aspiring hairdressers tend to take on. Yet the median annual pay for a cosmetologist is $35,000

    According to the most recent federal data, La’ James programs cost up to $20,000, while graduates from their schools make anywhere from $23,000 to $30,000 annually.

    The Student Defense lawsuit is not the first time the school has found itself in legal jeopardy. The chain was sued in 2014 by the Iowa attorney general’s office, which accused it of deceptive marketing and enrollment practices. That suit resulted in a settlement in which La’ James forgave more than $2 million in student debt, paid a $500,000 fine and agreed to not make false or misleading statements about financial aid disbursements.

    In 2021, however, the attorney general’s office found that the school was misleading students about financial aid, and once again entered into a settlement where the school forgave more than $460,000 in institutional debt.

    This story about cosmetology schools was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Sarah Butrymowicz and Meredith Kolodner

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  • Curbing private equity’s expansion into child care – The Hechinger Report

    Curbing private equity’s expansion into child care – The Hechinger Report

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    Editor’s note: This story led off this week’s Early Childhood newsletter, which is delivered free to subscribers’ inboxes every other Wednesday with trends and top stories about early learning.   

    Last week the Massachusetts Senate unanimously passed a child care bill that would significantly expand state investment in child care. 

    Less publicized: The bill also includes provisions that could make it harder for private equity-owned child care providers to expand significantly in the state.

    Specifically, the bill takes steps to ensure that any given for-profit provider operating more than 10 programs in the state consume no more than 1 percent of the $475 millions in grants being proposed.

    Investor-backed chains now manage an estimated one in 10 child care centers in the country. That figure is likely to grow, according to several child care researchers, as states — and potentially the federal government — put new funding into the area, attracting investors interested in low start-up costs and access to public money.

    As a result, advocates and experts are pushing for more extensive and widespread regulations of the kind that are moving forward in Massachusetts. “We need to make sure there are real guardrails,” said Melissa Boteach, the vice president overseeing child care and early learning at the National Women’s Law Center. Along with colleagues, she plans this June to release a report outlining recommended regulations and safeguards.

    In making the push, Boteach and others cite private equity’s troubling record in managing other government-backed social services, including nursing homes and autism services. “Private equity’s track record in other sectors supported by public dollars – including home care, hospice care, and housing – foreshadows challenges the child care sector could face,” Boteach wrote in an email. In child care, profit-driven companies will take “money out rather than using that public funding to pay child care providers and teachers a living wage, upgrading facilities, [and] expanding into under-served communities,” she said.

    In a written statement, Mark Bierley, CEO of the Learning Care Group, one of the largest for-profit child care operators in the U.S., offered a very different take, calling it “our duty to prepare children socially, emotionally and developmentally for their transition into K-12 education.”

    “We have the resources to upgrade facilities, equipment and technology to ensure we fulfill that commitment,” he added. (More from his statement is below.)

    Hot takes on the issue

    “Private equity has no business in childcare centers. Its business model is completely contrary to the goals of providing quality childcare at affordable prices. It promises its investors ‘outsized returns’ in a short 5-year window – returns that considerably beat the stock market. It can only deliver on this promise by substantially increasing revenues or decreasing costs to the detriment of children, parents, and taxpayers.” – Rosemary Batt, co-author of Private Equity at Work and numerous other studies of private equity’s impact on different professions and industries

    “Private providers bring decades of know-how and a tried-and-true approach to curriculum development. Our existing infrastructure is designed to meet the needs of specific age groups and is nimble enough to accommodate the ever-evolving needs of working families. It’s our duty to prepare children socially, emotionally and developmentally for their transition into K-12 education, and we have the resources to upgrade facilities, equipment and technology to ensure we fulfill that commitment.” – Mark Bierley, CEO of the Learning Care Group, one of the largest for-profit child care operators in the U.S.

    The proposed regulations in Massachusetts follow a couple other related state efforts. Vermont recently put ownership disclosure requirements into its package expanding funding for child care, and also capped tuition hikes by providers. New Jersey limits for-profit programs that participate in its public pre-K system to a 2.5 percent profit margin.

    But Elliot Haspel, a senior fellow at the think tank Capita, who has been tracking private equity expansion in child care closely, described the proposed Massachusetts measures as “the most targeted guardrails we’ve seen to date” against investor-backed companies consuming the lion’s share of new public investment. 

    Haspel points out that there’s been similar momentum internationally, with British Columbia specifying that priority for public funding goes to public and nonprofit programs, and Australia requiring larger providers that manage more than 25 sites to submit more extensive financial reports.

    The U.S. has historically spent very little on child care compared to other wealthy nations. Partly as a result, investor-backed, for-profit chains in the U.S. operate predominantly in middle-income and wealthier neighborhoods and communities, where they can often charge substantial tuition. That could change if more public funds flow into child care, leading to significantly increased government subsidies for lower-income children.   

    Last year, President Biden’s administration pushed for greater transparency and accountability in nursing home ownership after research showed that private-equity owned facilities on average had worse outcomes, including more patient deaths. But there’s not much information that compares the quality of for-profit and nonprofit child care programs, which could hinder efforts to put restrictions and regulations on the companies.

    Haspel said “the first step for the federal government is trying to get a lot more information” in a landscape where the quality can vary dramatically within all ownership types — investor backed or not. That said, he added that there’s no reason not to take such steps as ensuring a certain percentage of public funding is used to pay educators and requiring centers to disclose financial and ownership information.

    “Some of the potential guardrails are common-sense,” he said.

    This story about private equity and child care was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Sarah Carr

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  • Holding transcripts hostage may get a lot harder, thanks to new federal rules

    Holding transcripts hostage may get a lot harder, thanks to new federal rules

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    Editor’s note: This story led off this week’s Higher Education newsletter, which is delivered free to subscribers’ inboxes every other Thursday with trends and top stories about higher education. 

    To Florina Caprita, the mother of three young children, the paralegal studies program at Ashworth College seemed like the perfect route to a much-needed career. The classes were entirely online, and an admissions officer told her she could make small monthly payments toward the $4,465 tuition while she was taking classes, instead of having to pay it all at once.

    But in 2018, a family emergency forced her out of school, just six credits shy of her degree. To make matters worse, she fell behind on her monthly payments, which had steadily increased from $25 to more than $200.

    She struggled financially for several years as her health declined, but last spring, she got an opportunity to earn a degree at a different college. The problem? Ashworth, an unaccredited, for-profit school in Georgia, refused to release her transcript until she paid – in full – the more than $2,200 that she owed them.

    This practice, known as transcript withholding, has become a growing worry for state and federal regulators. Critics say that it makes it harder for students to earn a degree or get a job, which would allow them to earn enough to pay back their debts. But the system of oversight is patchwork; no single federal agency bans it, state rules vary and there are significant challenges with monitoring the practice. That means students like Caprita can fall through the cracks.

    In October, the Department of Education released new rules that would bar colleges from withholding a transcript for any semester for which a student used federal student aid money and paid their balance in full. The move was lauded by advocates as a huge step forward in eradicating the practice – but would not apply to any of the thousands of schools that don’t accept federal student aid to begin with, including Ashworth College.

    Experts have long criticized authorities for not providing better oversight of these schools.

    “Some of these schools exist that way because they would never qualify, and that’s usually because they provide very low value to students, unfortunately,” said Edward Conroy, a senior policy advisor at the progressive think tank New America. “Not in all cases, but a lot of these programs are not lifting people out of poverty, they’re not providing a route to middle class jobs or middle-class income, and so I think sometimes they’re of questionable value.”

    Unlike the Department of Education, the Consumer Financial Protection Bureau does have jurisdiction over colleges that don’t qualify to receive federal money. And in the past year, the agency has begun investigating colleges for refusing to release transcripts because of a loan balance owed directly to the school.

    “If they help me, I can help to pay them. If they withhold [the transcript] from me, then I how can I ever pay them?”

    Florina Caprita, who has an outstanding loan from an online for-profit university

    In 2022, the agency found that transcript withholding was an abusive practice under the Consumer Protection Act, “designed to gain leverage over borrowers and coerce them into making payments.”

    The CFPB has adopted a broad definition of what a student loan is. They include in that category things like payment plans, arguing that those are essentially forms of credit. Money owed for things like unpaid room and board balances or overdue fines, however, is not covered. 

    By their definition, Caprita should have been eligible to access her transcript. But she says she called and emailed the college repeatedly to no avail. She even asked to re-enroll in a new payment plan but college officials said their hands were tied and she would have to take up the matter with a collection agency.

    “If they help me, I can help to pay them,” said Caprita, who is 44 years old and is hoping to join a Christian ministry. “If they withhold it from me, then I how can I ever pay them?”

    Ashworth College did not respond to requests for comment.

    A CFPB official acknowledged that it’s impossible to examine the policies of all of the thousands of colleges and universities across the country. The bureau has tried to make enough public statements for institutions to take note and change their policies without additional intervention, the official said. The agency has investigated some colleges for transcript withholding and made them change their practices but has not released any institution names publicly.

    The education department’s rule on transcript withholding will go into effect in July 2024, joining other federal and state regulations meant to protect students from transcript withholding.

    An education department spokesperson said that the agency plans to adjust its oversight procedures to ensure that schools that receive federal funding are following new regulations and that all student complaints alleging transcript withholding are investigated. Schools may eventually lose eligibility to receive federal student aid if they don’t comply with the new rule.

    “It wouldn’t completely surprise me if one of the institutional reactions was, ‘We’re just going to stop doing this, period.’ ” 

    Edward Conroy, senior policy advisor, New America

    Despite the fact that the regulation only applies to students who have used federal money to pay for their education, advocates hope that colleges will respond in a broader way.

    “It wouldn’t completely surprise me if one of the institutional reactions was, ‘We’re just going to stop doing this period,’ ” Conroy said. “The number of students who are paying completely out of pocket isn’t that big; you don’t want to have separate administrative systems.” 

    Indeed, that’s what some policymakers have seen happen at the state level. Some states have only banned the practice at public institutions or for debts of up to a certain amount. In other cases, schools are only required to release transcripts for certain uses.

    For instance, in 2022, Colorado passed a law prohibiting withholding transcripts from students requesting them for several reasons including needing to provide it to an employer, another college or the military. Carl Einhaus, a senior director at the Colorado Department of Education says that most institutions found it too burdensome to differentiate between which transcript requests were required by law to be honored and which weren’t and have opted to grant all requests.

    “They’re not going to bother trying to figure out how to operationalize this very difficult thing to operationalize,” he said.

    Starting next summer, the Colorado law also requires institutions to submit data about how many students requested transcripts and how many were withheld. Einhaus said that some schools initially resisted the new law, arguing that it would take away one of their main tools to recover money owed from students. “It will be interesting to see if this really is having an impact on the amount of debt they’re able to collect back,” he said.

    But Brittany Pearce, a program manager at the higher ed consulting firm Ithaka S+R, is skeptical that withholding transcripts was ever an effective way to recoup debt. “From a really practical business sense, nobody is winning,” she said.

    This story about transcript withholding was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter. Check out our College Welcome Guide.

    The Hechinger Report provides in-depth, fact-based, unbiased reporting on education that is free to all readers. But that doesn’t mean it’s free to produce. Our work keeps educators and the public informed about pressing issues at schools and on campuses throughout the country. We tell the whole story, even when the details are inconvenient. Help us keep doing that.

    Join us today.

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    Sarah Butrymowicz and Meredith Kolodner

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