Senator PELL. The next witness is a panel representing the National Association of Trade and Technical Schools and the National Home Study Council, William A. Goddard, executive director, National Association of Trade and Technical Schools; William A. Fowler, executive director, National Home Study Council; and Bernard H. Ehrlich, counsel.

Thank you for being with us.

Your statements will appear in the record in full at the conclusion of your testimony.

You might care to summarize them.

STATEMENT OF WILLIAM A. GODDARD, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF TRADE AND TECHNICAL SCHOOLS; WILLIAM A. FOWLER, EXECUTIVE DIRECTOR, NATIONAL HOME STUDY COUNCIL; BERNARD H. EHRLICH, COUNSEL, A PANEL REPRESENTING THE NATIONAL ASSOCIATION OF TRADE AND TECHNICAL SCHOOLS AND THE NATIONAL HOME STUDY COUNCIL

Mr. GODDARD. I am William A. Goddard.

In light of the nature of the questioning, we would be very happy, in my case, to forgo the reading of the testimony. Since I have provided copies, we will be most happy to go right into answering any questions you have.

I did bring with me, however, some reports that were mentioned in my testimony, and I would like to present these to the chairman to support the testimony.

Senator PELL. I cannot promise to include those reports, because they look rather thick, but we will keep them on file and peruse them. Mr. FOWLER. I am William A. Fowler, executive secretary of the Accrediting Commission of the National Home Study Council, and I, also, would like to say that since we have submitted our testimony, and you have copies of it, we would be happy to answer questions and discuss any items you would like to discuss, rather than take the time to read the testimony.

Mr. EHRLICH. Mr. Chairman, my name is Bernard Ehrlich, and I am counsel for both groups, and we stand ready to answer any questions individually or collectively, as you see fit.

Senator PELL. I would ask if you could submit for the record your idea of what you think helpful legislation would be from each of your groups or collectively, and we will absorb that, as well as the suggestions of the other group.

I would also ask if any of you are registered as lobbyists?

Mr. FOWLER. NO.

Mr. GODDARD. NO.

Mr. EHRLICH. NO.

Senator PELL. I want to get one specific question out of the way in connection with Mr. Fowler's testimony.

At the bottom of page 7, you stated that: "In home study, completion of a course is not an absolute in order for a student to derive genuine satisfaction or achieve his personal career objectives."

This statement brings to mind the allegation often made concerning correspondence schools.

If all students participating completed their courses, then the schools could not make a profit.

Do you think there would be any truth in this allegation?

Mr. FOWLER. Certainly many students achieve great benefit from taking part of a course, and particularly a correspondence course where the diploma is not as meaningful as it would be from a school where the student went to attend.

In the allegation that the school makes its profit from those who do not finish, you have to look at the overall picture of an institution's financing and financial resources and income and what profit it does make, and recognize that there are all kinds of expenses that are included, and the overall picture of tuition charges and commissions paid to representatives and so forth are included in this.

We have had some discussions on this subject, of course, and schools are not making large profits in very many cases. In fact, I do not know of any case where a school is making very large profits, so that it is awfully hard to say that the profit comes from one part of a student's tuition and not from another.

In other words, it is an overall picture of financing, just as it is in the household budget, and the prices are set accordingly and with a certain amount left at the end for profit. And in many cases, that amount does not materialize or no amount materializes for that.

It is not possible to say that the school makes its profit from this or from that really. It is an overall financial picture as in any business.

Senator PELL. Do you have a composite statistic or figure of the financial balance sheet of your institutions?

Mr. FOWLER. We do not.

Each institution is evaluated on its own objectives, and the way it accomplishes them. Our institutions-we have about 80 that are accredited-frequently advertise under different names, so more than 80 institutions are listed in our directory.

For instance, an institution may have an electronics course and may also have a motel-hotel training course, and it advertises under both names. Therefore, those are the names the prospective students would be looking for in our directory.

So, in this group of 80 institutions, we have about 18 or 19 nonprofit institutions. The Hadley School for the Blind charges no tuition for students at all. It offers courses for blind students. We have the John Tracy Clinic, which charges no tuition. We have the National Safety Council Correspondence Courses, we have Southern Baptist Seminary Group, and the American Medical Record Association.

We have the Home Study Institute of the Seventh Day Adventist Church here in Washington. We have small single proprietorships. We have partnerships. We have large corporations.

And the financial picture of all of these is different. They are also different in their approach to enrollment of students. Some enroll by mail as the result of advertising, and one school has the representatives of General Motors Corp. take the school's brochures to the dealers and recommend the course to instruct truck salesmen. The only cost is for printing the brochures. General Motors does the rest.

To answer your question, there has been no way to develop a composite or chart of accounts for correspondence schools that would be representative of even a fraction of our schools.

Senator PELL. To oversimplify what you stated, you have about 80 members?

Mr. FOWLER. That is correct, 80 accredited institutions.
Senator PELL. Of which 20 are nonprofit?

Mr. FOWLER. About 20 percent-let us say 16 or 17.

Senator PELL. About 20 percent.

Now, do you accredit institutions or do you accredit individual courses?

Mr. FOWLER. We accredit institutions and we look to the highest entity to accredit.

For instance, ITT has two correspondence programs. One is the School of Speedwriting, New York City. It is a correspondence program that enrolls people in a shorthand, speedwriting course.

Senator PELL. Excuse me.

Teaches them speedwriting; does not teach them shorthand.
Mr. FOWLER. Teaches them speedwriting.

We also have the Research and Review Service, which is an entity that is under a completely separate part of ITT. It has insurance reports and a course in insurance. In order for the school of speedwriting to retain its accreditation, the Research and Review Service has to be accredited and retain its accreditation because they are both owned by ITT.

What I am saying again, is that our accreditation is institutional, and we look to the highest entity of management to accredit and the highest entity cannot have any one correspondence program or course accredited without having all its correspondence courses accredited. Senator PELL. How many institutions give correspondence courses, home study courses, that are not members of your institution, do you have any idea?

Mr. FOWLER. It is really very difficult to say.

We have a nonmember mailing list in our office that has some 650 institutions on it. Many of those are home study division of colleges and universities. Some of them are Armed Forces Correspondence Schools. Some of them are religious schools that would not qualify for accreditation.

I would say somewhere in the vicinity of 400 to 500 institutions, private institutions, are offering correspondence instruction. But it is very difficult to specify a given number.

Senator PELL. Like the Naval War College correspondence courses?

Mr. FOWLER. That is correct.

There are somewhere in the vicinity of about four and a half to five million people in the United States enrolled in correspondence

courses.

Senator PELL. Is LaSalle Extension University of Chicago-I forget the exact name is that a member of your group?

Mr. FOWLER. LaSalle Extension University is a member of the National Home Study Council. It is an accredited institution and it is a division of MacMillan, Inc., the publishing firm in New York City.

Senator PELL. My recollection is that they overpromise in advertisements.

Have you ever looked into that?

Is overpromising in an advertisement grounds for withdrawal of accreditation?

Mr. FOWLER. Our standards are very clear on this, and they say that, could read it, but exaggeration, claims that cannot be substantiated, are a violation of the standards of the Accrediting Commission and are subject to a review as part of the school's activity. It is certainly subject to review by the Accrediting Commission and might result in the loss of accreditation.

Senator PELL. Do you not think you ought to change your rules and say, "will result"?

Mr. FOWLER. If the violation continues, it would result.

The Commission advises the school of the violation, and due process procedures are followed. If the school then refuses to change, the school would lose accreditation.

Senator PELL. Well, I think you ought to let your members know that overadvertising is grounds for loss of accreditation, and if they overadvertise, suspend them until they mend their ways. That would be my own recommendation to you.

Mr. EHRLICH. We go much farther. We do not just suspend.

If an advertisement is in violation of the standards, the Commission will take action against the school unless it changes its advertising to meet with the requirements of the Accrediting Commission. So it is not a question of suspending them until they do, which would be a period of time. They must comply and they must make whatever changes or modifications are necessary.

Sometimes it may be the fault of an advertising agency who put in an overzealous ad. We find, for the most part, accredited institutions want to comply with the rules.

These things are brought to their attention, and they usually move rather quickly to comply.

Senator PELL. I just cite LaSalle because I notice they advertise a good deal, and it seems to me they promise the sky.

Have you never gone after those advertisements or gone after that institution?

I have nothing against LaSalle in particular. It happens to remain in my mind.

Mr. FOWLER. It is an interesting case. We have a history with LaSalle.

I do not know how much you know about it.
Senator PELL. I do not.

Mr. FOWLER. About 5 years ago, this institution did lose accreditation. It was up for its 5-year review by our Accrediting Commission. The Accrediting Commission did not continue accreditation of the school. This resulted in the kind of lawsuit you were discussing earlier.

As a result of well, as one of the results of this review and the re-examination of the school and the fact that the school did regain accreditation because it did meet the standards, the school became particularly zealous in the way it developed its advertising. I have visited the school on many occasions and have seen the background process that the school uses to develop advertising.

They use what they call fact books. These fact books take every segment of every ad and say this is what we say, now how do we substantiate it?

They have the documentation to substantiate the statement. I think in the case of LaSalle, all of the ads I have seen since that time have been very carefully worded, very carefully prepared, and can be substantiated based on facts.

Senator PELL. I would ask the counsel to prepare to insert in the record at this point some sample advertisements from LaSalle, and any other groups that we can clip out, particularly those match book covers, and men's magazines, and I think it would be interesting to have five or six advertisements of that sort put in the record at this point.

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