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Sen. Elizabeth Warren, D-Mass., along with a handful of other Senate Democrats, sent a letter to Education Secretary Betsy DeVos Wednesday asking her to focus coronavirus stimulus money meant for higher-education on public and nonprofit universities, and to implement strict restrictions on how the money can be used if sent to for-profit colleges.
The CARES Act, the offical name of the $2.2 trillion package signed by President Trump late last month, includes more than $14 billion for a “Higher Education Emergency Relief Fund” to be distributed to universities to help them cover costs of dealing with the coronavirus and provide grants to students so they can financially deal with the “disruption” caused by the virus.
Warren, along with Sen Dick Durbin, D-Ill., Richard Blumenthal, D-Conn., and Sherrod Brown, D-Ohio, said the Department of Education should exclude for-profit colleges from receiving those funds.
“The CARES Act defines eligibility for institutions of higher education in accordance with Title I of the Higher Education Act of 1965 (HEA), giving the Department full authority to target funds to public and private, nonprofit institutions,” the letter reads, before explaining that the title, in their reading, excludes for-profit colleges. “As such, we believe the most legally sound interpretation of the CARES Act would exclude for-profit colleges from the fund entirely.”
The Democrats also note that 60 percent of students at for-profit colleges were already taking classes online rather than in person, meaning the industry theoretically would have an easier time adjusting to the changes brought on by the coronavirus.
If the Department of Education does choose to allow for-profit colleges to access the coronavirus funds, however, Warren and her colleagues urged DeVos to implement strict guidelines for how they could use the money. Their suggestions included requiring that the for-profit institutions only use the funds for instruction, aid to students and other educational goals; freezing executive compensation; banning the for-profit schools from engaging in stock buybacks; prohibiting the funds to be used for marketing, and more.
They also asked that DeVos report to Congress how the for-profit schools are using the stimulus funds, if they receive them.
‘I agree with my Democrat colleagues that the colleges and universities that need relief funds should get them, and that predatory universities should not. But it’s laughable to think that the privileged schools at which Senator Warren used to teach might also benefit. Former Harvard professor Senator Warren’s letter doesn’t go far enough.’
— Rep. Mark Green, R-Ky.
For-profit colleges occupy a controversial space in American politics. Such schools have seen their enrollment balloon in recent decades as they’ve recruited aggressively, sometimes making deceptive claims and leaving students with poor outcomes and loads of student debt. The Obama administration even closed down two major chains.
But such colleges can be a viable option for people who don’t see a traditional four-year college as a good fit for them. They also often help workers seeking new jobs build needed skills, something Rep. Fred Keller, R-Pa., says is important as many people have seen their jobs disappear as the U.S. transitions its economy to the 21st century.
“Private institutions or schools partnering with the business community are currently filling the need for training in skills necessary for in-demand jobs,” Keller, who represents a largely rural Pennsylvania district, said. “In traveling Pennsylvania’s 12th Congressional District, I have seen first-hand the life-changing opportunity privately-funded skills training has provided. To deny that opportunity by denying COVID-19 relief funding to these critical education institutions will stifle our recovery and limit educational choice for Americans eager to have it.”
Rep. Mark Green, R-Ky., said he shares Warren and her fellow Democrats’ suspicion of the for-profit college industry and its spotty track record, but thinks her letter should do more to target private universities that are technically nonprofits but have huge endowments.
“Small colleges in my state are hurting — they need help and don’t have access to billion-dollar endowments,” Green said. “I agree with my Democrat colleagues that the colleges and universities that need relief funds should get them, and that predatory universities should not. But it’s laughable to think that the privileged schools at which Sen. Warren used to teach might also benefit. Former Harvard professor Sen. Warren’s letter doesn’t go far enough.”
Green cited reports that some nonprofit universities, like Harvard, which has an endowment of about $40 billion, are laying off contracted workers without pay. The Harvard Crimson reported that janitors, dining employees and other subcontracted workers are not being paid as the university largely shuts down during the pandemic.
The Associated Press contributed to this report.