any broader. There is no hesitation or reservation s training material here which, as late as last month, y was current enough to send in response to a question of pretation. So you still regard it as a legitimate inter statute, I take it? Mr. PROFFITT. No, sir, I did not send that to Mr. Ehr pretation. I sent that to him as a compilation of mate this issue which he asked us to send to him. This st tained in a 1973 training manual for the basic grant I one thing. Our eligibility certificate, which is the forr school about its scope of eligibility, said a different thi I have indicated to you. This was an unfortunate bit disparity, I admit, in what the Office of Education w people and to institutions, but this did not have the for The formal, responsible indication of scope of ins bility came from the eligibility certificates, and alth ing contradiction was an unfortunate and confusin took place in 1973 and has been superseded by more grant handbooks which I think have corrected that es Mr. FORD. So you are saying the statement was not not that that was a correct statement in 1973 and is n because we have changed the law? Nothing has happ change the law from 1973, has it? Mr. PROFFITT. Nothing has happened to Mr. FORD. With respect to proprietary schools, w that section of the law but not with respect to proprie Mr. PROFFITT. You are correct. Mr. FORD. And you would not draw from the w changed the section that our failure to change every tion at the same time was some indication that pro would be treated differently than before? Particularl the report from the committee, you will find we sp conference report language from the House report cifically that it was not intended that there was going lative change in the status of proprietary schools. Mr. PROFFITT. The way we are administering the e mination for proprietary schools today is the same wa administering it prior to the passage of the 1976 ame to then, we were notifying proprietary schools which tory definition of proprietary institutions of higher e as you will note on the eligibility certificate-only st and in good standing in the programs which admit dents-only high school graduates or the equivalent the basic grant program. So, we are not making toda in our interpretations and determinations of the el sions of the statutes regarding proprietary schools manner in which we were operating in 1973, 1974 and 19 Mr. FORD. You would be making a significant char you attempted to adopt some arbitrary percentage of that was permissible and therefore anything outside permissible. There is just no basis for getting to distinction. Mr. PROFFITT. We would be making a difference be have been saying, which is that was a "small percen able, to defining that small percentage. Mr. FORD. We would not want to in any way do anything that would have a chilling effect on people having access to programs that one type of person is taking for a credit toward baccalaureate degree and another person is taking to improve job skills or because it is directly related to some job promotion opportunity. He might have a good deal of experience in a particular field-it might be accounting or something of that kind-and yet he did not take accounting in high school. But he has been doing it for years in business and goes back now to get a skill. A secretary goes back and learns medical terminology to become a medical stenographer instead of just a plain stenographer. That means more money, particularly if she is working for the Government or a large corporation. These sorts of things would jeopardize the accreditation of the institution if they tried to accommodate this type of student. That clearly is not the intention of anybody that is involved legislatively. I would hope that, before you publish a proposed regulation, you bring it to us and talk about the possibility of legislating a solution to the problem if it continues to be a problem, but as I see it there is no problem except to the extent that somebody over there in your shop wants to make one. Now if you just stop telling people there is going to be a regulation in the future that will probably make them ineligible they will calm down perhaps after a while. But as it stands now, it is who do you believe. Should I believe that my business is going to be in jeopardy or should I believe that we can continue operating? I have the impression that the communications coming from regional offices and from your office over there have been unambiguous and direct and that they have created a clear understanding in the minds of many people that you are about to fall on them. Well, it is indicated here that you are not about to fall on them, at least not in the next few weeks. Mr. KORNFELD. Mr. Chairman, we have yet to decide whether we are going to go for proposed rulemaking in this particular issue or go in for legislation. It is a matter that is being studied within the Department at this point and it might very well be that we will be going for legislation rather than rulemaking. Mr. FORD. Counsel showed me a letter to Senator Morgan of North Carolina dated August 1 of this year from Secretary Califano which says on page 2: Consequently the Office of Education has taken the position that in such cases of technical noncompliance eligibility would not be terminated. To be more specific as to what constitutes a de minimis number, the Department intends to issue regulations which will define the number, percentage of non-high school graduates which may be enrolled as regular students in an eligible program. [Letter referred to appears in appendix.] I suggest that you are legally incapable of doing what Joe Califano said you are going to do here. I don't think you have any legal authority to do what he says you are going to do. If you want that authority, I think you should send a piece of legislation over here and let us take a look at it. Then we can come down on one side or the other and legislate the thing clearly, but I hope you won't do anything that will have the effect that the rumors are already having on continuing education by regulation. I think the reaction would be very strong in both the House and Senate inasmuch as there has been ab 97-379 - 78 - 3 solutely no discussion at any time that could remotely be interpreted as an intent by any individual member of the committee to be more rigid with or change the status of so-called proprietary schools as eligible institutions for students using these Federal programs. In short, I guess I am asking you not to issue a regulation unless you don't think it is going to do anything. And if it is going to do something, let us legislate it. I don't think you have got a very firm foundation for doing what whoever prepared this letter for Mr. Califano had in mind. It is gracious enough to say, "Before such regulation is to become final, hearings will be held and the public will be given an opportunity to comment on the proposed regulations.” That is nothing more than a statement on the requirements. I think probably, if there are those who believe that the purpose or the effect of that kind of regulation is a desirable thing and want to advocate it, the way to do it is by legislation. Would you say it is safe to tell people that until we have heard or seen something published in the Federal Register, they cannot anticipate that there is about to be regulation, 5 percent or 3 percent or 8 percent or something of the kind? Mr. PROFFITT. Yes, sir, we will certainly take that back to the Commissioner. How much of a problem we have though in responding to those school institutions where there is definite audit results indicating that a school is not now in compliance with the statute by a considerable amount of variance puts us in another kind of dilemma. Mr. FORD. Well, I don't like to second guess the lawyers that are involved but I would find it interesting litigating with you. If you had a practice that allowed me to get in a particular position, in good faith with an assumption this is the way the game is being played, and then you try to throw a new rule at me, after I developed a student population consistent with what I thought the rules were, and tell me, "That student population doesn't look right; your school is not eligible because you let the wrong kind of people get into it." This kind of narrow interpretation flies right in the fact of the philosophy of lifelong education which is that, if such a prerequisite gets in the way of someone who should have access to a form of learning that has value to that person at that time in life, it is an irrelevancy. That is the way education is going. If you recall the last time we fooled around with this section what we did was make absolutely sure because the question had been raised with respect to community and junior colleges that-they were going to be able to accept students without regard to their high school equivalency or high school graduation. I think it was purely an oversight that we did not tidily decide that if you are going to do this with one category of institution you examine how all the others are. I am sure that we could consider this legislation, if it is deemed to be necessary, but one thing I want to leave with you. I hope we can have a commitment from you that, if you are getting ready to do anything with this, you would take advantage of the opportunity to have your people meet with our people from this committee and the Senate committee before you let the other shoe drop. It might make it easier for everybody to understand what is happening and perhaps be supportive of what is happening. Mr. PROFFITT. Yes, sir, you have that commitment. Mr. FORD. Thank you very much. We will submit these questions that Mr. Biaggi wanted to have asked dealing with the 5-percent rule. I think you pretty well covered all of them but since he has the specifics it probably will be very easy for you to respond by letter to me as the chairman to Mr. Biaggi's questions. We will see this gets to you right away. Mr. PROFFITT. Thank you. Mr. FORD. Thank you very much. We got way off the track, Mr. Kornfeld, and we want to get back now to your testimony and I thank you for letting us shift the rules on you after you changed your position. [Prepared statement of Mr. Kornfeld follows:] FOR RELEASE UPON DELIVERY Mr. Leo L. Kornfeld Bureau of Student Financial Assistance Department of Health, Education, and Welfare Subcommittee on Postsecondary Education House of Representatives Monday, September 12, 1977 10:00 a.m. Mr. Kornfeld is accompanied by: William A. Blakey, Deputy Assistant Secretary for Legislation (Education), HEW Peter K. U. Voigt, Director, Division of Basic and State Student Grants, |