After a year of repeated for-profit college scandals — including the recent closure of Dade Medical College — Florida lawmakers are poised to consider new, tougher rules governing the schools.
The change follows several years in which lawmakers loosened standards and opened up more public money to for-profits. For the moment, the buzz is about greater consumer protections at the schools, which rely heavily on taxpayer money but receive little government oversight.
For-profit colleges enroll nearly one in five Florida college students — close to 300,000 students in total.
Though lawmakers are talking about stronger regulations, the proposals so far aren’t as aggressive as what some other states have done to protect students. And some Florida lawmakers may be hesitant to take any action whatsoever against an industry that donates generously to political campaigns and has many powerful friends.
That’s particularly true in the conservative House. Two House lawmakers who chair important education-related committees were previously honored as “legislator of the year” by the for-profit college industry.
The 2016 legislative session starts on Jan. 12. Committee meetings have already begun.
One for-profit college bill that’s being debated would shut down schools with student loan default rates over 40 percent — resulting in the closure of a handful of beauty schools and barber colleges. It easily passed its first Senate committee stop in mid-November.
Though lawmakers are talking about stronger regulations, the proposals so far aren’t as aggressive as what some other states have done to protect students.
Other proposals are directly linked to the fallout from the Oct. 30 closure of Dade Medical College.
Coral Gables-based Dade Medical left roughly 2,000 students in limbo when it closed without warning. Students now have thousands of dollars in student loan debt for college credits that won’t transfer to traditional schools.
Florida’s for-profit college oversight agency, the Commission for Independent Education, has a “Student Protection Fund” that is supposed to help students hurt by school closures by paying for them to finish their training elsewhere. But it applies only to for-profit colleges that offer diploma or certificate programs, like barber schools.
Colleges that offer associate’s and bachelor’s degrees, like Dade Medical did, aren’t eligible. Degree programs are more expensive, so the state’s student protection safety net fails to protect those students who need it most.
Dade Medical students also complain the commission hasn’t done enough to guide students through the chaotic closure. Former nursing student Ashley Baez said the agency sent students their Dade Medical transcript and emails with a list of other schools. That was it.
“They weren’t giving us answers,” Baez, 19, said. “There was really nothing useful at all.”
A recent Miami Herald investigation, Higher-Ed Hustle, showed how the commission is, by design, dominated by the same for-profit schools it is supposed to monitor, as four of its seven board members are for-profit college executives. Dade Medical owner Ernesto Perez — who recently pleaded guilty to illegally bundling more than $159,000 in campaign contributions — used to be a commission board member.
The commission routinely dismisses student complaints, including those alleging fraud or illegal activity by school operators.
A bill filed by Jeff Brandes, a St. Petersburg Republican, would make some changes to the agency. For example, the legislation would add degree-issuing for-profit colleges to the commission’s student protection fund. The bill would also require new schools to post a bond of at least $100,000 — providing a pot of money that can be used to help displaced students.
“That becomes another check and balance,” Brandes said.
Under Brandes’ bill, for-profit colleges would still control a majority of the commission’s board. The changes are less sweeping than what Kentucky did in 2012, when the state abolished its state oversight agency and created a new one where for-profit college representatives were no longer the majority.
Brandes’ bill doesn’t yet have a House counterpart, but it is supported by the Florida Department of Education, which oversees the commission.
Another Senate bill, filed by Miami Gardens Democrat Oscar Braynon II, would repeal a controversial 2013 law that legalized unaccredited physical therapy assistant programs.
No other state allows for unaccredited programs in this field. The 2013 law was pushed by Dade Medical, and sponsored by a lawmaker, Miami Republican Rep. Carlos Trujillo, whose sister-in-law received free tuition at the for-profit college.
Dade Medical charged $40,050 for its unaccredited physical therapy assistant program and reaped millions of dollars through the hundreds of students it signed up.
Students say they weren’t told that graduates of unaccredited physical therapy assistant programs, under federal rules, can’t treat Medicare or Medicaid patients. Several hospitals told the Herald they would never hire these students.
While all this was happening, Sen. Braynon took a job with Dade Medical’s smaller affiliate school, the University of Southernmost Florida.
Braynon then traveled to Gainesville in February to push the Board of Physical Therapy to allow graduates of unaccredited physical therapy assistant programs to get licensed.
Although the board was originally reluctant, Braynon’s appearance helped sway members to give in.
Braynon told the Herald that the school didn’t ask him to go.
After the Herald reported on Braynon’s Gainesville trip, the senator said he’d had a change of heart. He now supported having accreditation standards in physical therapy. Less than a month later, he filed his bill to restore the accreditation requirement.
Braynon’s bill does not yet have a House companion. And as a Democrat, he faces a tougher time getting legislation passed in the GOP-dominated Legislature.
In the staunchly conservative Florida House, there’s generally been less of an appetite to regulate for-profit colleges. Lawmakers in key positions are friendly with the industry.
For instance, Miami Rep. Erik Fresen, a Republican who chairs the Education Appropriations Subcommittee, was named “legislator of the year” by Florida’s for-profit college lobbying group, the Florida Association of Postsecondary Schools & Colleges, in 2013.
Fresen has received at least $25,500 from the “career college” industry, made up mostly of for-profit schools. Asked about the award, Fresen told the Herald last week that organizations “give away those things to everyone.”
His co-winner of the award that year was Rep. H. Marlene O’Toole, who chairs the House Education Committee.
The staff director for that committee, Kathy Mizereck, was previously the executive director of the lobbying group.
In the series Higher-Ed Hustle, Fresen said the “quick buck” predatory practices of some schools were a “major problem, and we have to address it.”
Last week, Fresen told the Herald he can’t file any bills himself to tackle the issue, because high-ranking committee chairs don’t file their own bills. He has helped the industry in the past, however, pushing a measure that gave failing nursing programs — like Dade Medical Colleges’ — an extra year of operation before being shut down.
Another Miami representative, Democrat José Javier Rodríguez, has filed a for-profit college bill two years in a row. The Rodríguez bill would shut down schools with student loan default rates over 40 percent, or over 30 percent for three consecutive years.
In September, the Florida Nurses Association endorsed Rodríguez’s proposal. The nursing association’s executive director, Willa Fuller, said there are concerns about the quality of some nursing programs. As the number of for-profit nursing programs in Florida exploded in recent years, the state’s overall passage rate on the professional exam dropped from 88.4 percent in 2009 to just under 72.6 percent in 2014.
Rodríguez’s bill has been ignored by House leadership and has never gotten a committee hearing. Rodríguez said he’s encountered resistance from key GOP lawmakers in the House, who say that regulating for-profits is a “federal problem.” Though most of the taxpayer money going to for-profits consists of federal Pell grants and loans, nearly $15 million a year in state financial aid grants are also earmarked for for-profit schools.
Rodríguez said some House lawmakers believe the state shouldn’t regulate for-profits because they are private businesses. He called this argument “difficult to stomach” when for-profit colleges get nearly 90 percent of their revenue from taxpayers.
“Until reforms pass the House, nothing has changed,” Rodríguez said.
The tone is different in the Senate. A couple of weeks ago, the Senate version of Rodríguez’s bill easily passed its first committee test this year. That version is sponsored Sen. Jeremy Ring, a Parkland Democrat, and Sen. Don Gaetz, a Niceville Republican who was previously Senate president.
At the Nov. 17 Senate Higher Education Committee hearing on the bill, a South Florida for-profit institution — Florida Barber Academy in Plantation — showed up in opposition. The school has an average student loan default rate of nearly 42 percent over the past three years, and would be one of four for-profit colleges forced to close.
Bob Harris, an attorney representing the barber school, told the Senate committee his client didn’t deserve the “death penalty.”
“For some reason, the barber/cosmetology field, they tend to have an issue about their students defaulting,” Harris said. “I think it’s the nature of the beast, not necessarily the nature of the institution.”
Harris also said default rates are heavily affected by the economy, and “as we know, in 2008, 2009, things got bad.”
But senators weren’t moved.
“Do you really believe that a 40 percent default rate is responsible?” Gaetz asked.
Ring, the other bill sponsor, criticized the college for “blaming students.”
“They did not blame themselves one bit,” he said of the school. The bill passed committee on an 8-to-1 vote.