24 low level, with grants reduced somewhat, and in the third and fourth years of education, grants would be eliminated and loans progressively increased. Since most defaulters attend school no more than a year (and frequently drop out before then), proponents of the plan argue that defaults could be greatly reduced without reducing access for needy students. Critics of the plan contend that the program would serve as an incentive for even more low-income students to reject college in favor of short-term, trade-oriented education and would simply replace defaulted loans with grants in proprietary school coffers. Another proposal, incorporated in earlier House legislation sponsored by House postsecondary subcommittee chairman Pat Williams (D-MT), is aimed at reducing the need to incur loans by making the Pell Grant program an entitlement with a benefit level assured to those who qualify. MAJOR STRUCTURAL REFORM A sweeping structural reform, proposed in a variety of manners, is to take nonbaccalaureate (or non-AA degree) vocational programs out of the existing higher education act student aid programs and create a separate aid program for students in these programs. The theory driving this proposal is that vocational programs are fundamentally different from college-degree programs in that they do not purport to give a general education to their students but, rather, to train them for specific skills. It is therefore appropriate, proponents argue, for the federal government to hold these programs accountable for providing training that meets the needs of the job market and provides access to it. The key ingredient of many such proposals is to limit eligibility to schools that meet specific output goals and to provide federal payment only upon successful completion of these goals. In other words, schools would be paid after students completed the training program, and only if they met specific retention and placement goals, rather than the school receiving up-front payments based only on enrollment. This is basically the way the Job Training Partnership Act (JTPA) currently works. Community college interests as well as proprietary schools have objected vigorously to proposals of this nature. 25 CONCLUSION In cataloguing proprietary school abuses and some of the proposals offered to remedy them, it is important to emphasize that most proprietary schools have not wound up on the front page because of horror stories attributed to them. (Only 2 percent have ever been the subject of critical articles, according to the proprietary school lobby.) Obviously, thousands of proprietary school graduates have been pleased with their education, have found productive work and have paid back their loans. However, the evidence does suggest that the claims made against proprietary schools merit investigating. It is not simply a matter of a “few bad apples," as the schools purport. As Congress crafts federal student aid policy for the 1990s, the growth and practices of proprietary schools will occupy a prominent place on the agenda. Mrs. LowEY. Thank you very much. Mr. Jerome? STATEMENT OF STEPHEN J. JEROME, PRESIDENT, ASSOCIATION OF PROPRIETARY COLLEGES, BRONX, NEW YORK Mr. JEROME. Thank you. I just want to thank you for inviting me here today. As the last speaker, I should probably ask if there is anyone still sitting here listening. I am Stephen Jerome and I am the president of Monroe College also in the Bronx. It's been in existence for 58 years, and I've been there for 25 years. I have a marvelous story to talk about two special groups in proprietary education. One which I'm the president of is the Asociation of Proprietary Colleges consisting of 33 colleges in our State with over approximately 28,000 students, and the other is a proprietary group of regionally accredited colleges and universities throughout the United States consisting of 60 colleges. The first and probably the most important issue before us is to redefine the definition of institutions in higher education. In our State, the State of New York, the Board of Regents makes no distinction between colleges and higher education. On the Federal level, all proprietary institutions have a definition of vocational. We feel very strongly that these two groups should be viewed on the educational merits that we possess and not on the word "proprietary," and for that reason, we are asking for a change of definition in Title XII, Section 1201A and this is all noted in the testimony that I have handed in. Our graduates after receiving a degree at our institution go on to their third and fourth year. We've been very involved, and we are recognized by granting a degree by the Secretary of Education in Washington. We have marvelous retention. We have very high graduation rates. Our institution, this past 2 weeks ago, graduated 573 graduates, and that is largely a female population dealing with the same problems that we heard from Dr. Santiago and Hostos Community College. We want to be recognized for what we really are, and we are truly ecologists. My second point is about the GSL default rates. Our institution and our in-city population has about five percent of our student population receiving GSLs. If that 5 percent was approximately 90 students, and for some reason 35 of those 90 students default, our default rate is approximately over 35 percent. We feel very strongly that the mathematics in figuring the default rates is about 1,000 years behind and a lot of educational decisions must be made to properly handle this situation. Inner-city students have a lot going against them. Twenty-five hundred dollars is a lot less than the $49,000 we spend keeping people in prisons within our State. My last point is a special group of students that we in New York City see, and that's a group called Ability To Benefit Students. These are students who have dropped out of high school. Many of them are bright and many of them have dropped out of high school because of situations beyond their control. We want to make sure that those students who are very successful are given the opportunity to go into higher education, to complete their education because this is really their last hope and this is really their way out of where they are in their escape into the future. We've been doing this for a long time. We've been in the Bronx for 58 years and we are very proud of what we do. These two associations, which I speak for, have come a long way in proprietary education and they are truly colleges. As I ask all of you, to please recognize us as what we truly are by definition, colleges. I thank you. [The prepared statement of Stephen J. Jerome follows:] MONROE COLLEGE 29 EAST FORDHAM ROAD BRONX, NEW YORK 10468 (212) 933-6700 STATEMENT OF STEPHEN J. JEROME PRESIDENT, ASSOCIATION OF PROPRIETARY COLLEGES AND MEMBER, ASSOCIATION OF REGIONALLY ACCREDITED COLLEGES AND UNIVERSITIES SUBMITTED TO THE SUBCOMMITEE ON POSTSECONDARY EDUCATION NEW YORK UNIVERSITY JUNE 24, 1991 |