Reauthorization of the Higher Education Act of 1965
Mr. Ron Blumenthal Vice President of Operations KAPLAN Higher Education Corporation Accompanied by Elaine Neely-EaconaVice President for Financial Aid Kaplan Higher Education Corporation
Archived Information

Thank you for the opportunity to appear before you today to discuss the priorities of Kaplan, Inc., with respect to the reauthorization of the Higher Education Act. I am Ronald Blumenthal, Vice President for Operations, and with me today is Elaine Neely-Eacona, Vice President for Financial Aid for Kaplan Higher Education Corporation. Kaplan, Inc., is a multi-faceted education company, and Kaplan Higher Education is our largest division.

Kaplan Higher Education

First, I'd like to share some information with you regarding Kaplan Higher Education and the students we serve:

  • Our 44,000 students include those in 46 brick-and-mortar campuses in 14 states, plus students across the country and in U.S. territories enrolled in distance learning programs.

  • We offer certificate programs, as well as associate and bachelor degree programs. The fields in which our students are engaged include healthcare, criminal justice, design and fashion, paralegal studies, information technology, and business. We also offer advanced degrees in law through Concord Law School.

  • Our students are older; their average age is 27, and more than half of our students identify themselves as racial or ethnic minorities.

  • 73 percent of our students are independent for purposes of student financial aid, and their average household income is $18,849. Therefore, nearly 60 percent of our students receive Pell Grants.

Higher Education Act Reauthorization

Kaplan is proud to help individuals achieve their educational and career goals. As our mission statement says, "We build futures one success story at a time." We believe that reauthorization of the Higher Education Act presents an opportunity to ensure that quality education and career options are available to all motivated individuals:

  • Kaplan's overriding priority for reauthorization is to ensure that the previously under-served individuals who comprise much of our student population continue to receive accessible, quality education.

  • We support initiatives that increase competition, which among traditional schools has already resulted in a higher education system that is the best in the world. We believe competition will produce similar results for non-traditional schools and online education.

  • Kaplan supports accountability and believes that taxpayers' dollars used to fund student loans and grants need to be carefully guarded and used for the purposes for which they are intended.

  • At the same time, we do not believe that student loan default rates are the best measure of program quality. We welcome exploration of improved measures of quality that may be better suited to the realities of 21st century postsecondary learning.

  • We believe students would be best served if significant policy issues are considered through the comprehensive approach that reauthorization of HEA provides.

Now, I would like to address some specific policy issues that we believe need attention in reauthorization.

The 50 Percent Rule

Kaplan is proud to serve a student population that is under-served and unlikely to find other quality options for education and career training. Most of our students are not higher income individuals seeking advanced degrees. They are more likely adults with families; many are single parents, holding full time jobs and working toward credentials that will allow them to improve their standard of living and provide for their children. They are eager to improve their education online at times that traditional classroom learning would not be an option because of their job and family responsibilities.

To qualify for student aid, an institution must keep its distance learning courses to less than 50 percent of the total courses it offers. That provision is anachronistic to the realities of 21st century learning. Distance learning is still considered in the same category as correspondence courses, and we believe that the upcoming reauthorization is an opportunity to unleash the power of distance learning, which has the potential to revolutionize American education and truly make it a lifelong endeavor. There are currently efforts under way in Congress to provide exemptions from the 50 percent rule for distance learning. While we applaud the intent, the proposed exemptions would be based on unrealistic default rates, which are, at best, a blunt instrument as a measure of program quality. The proposed legislation would impair our ability to continue to serve needy students.

We believe that reauthorization of HEA would be the better way to consider changes to the 50 percent rule as the significant policy issue that it is and examine innovative, creative approaches that will enhance distance learning opportunities for all student populations, not just those seeking advanced degrees.

Distance Education Demonstration Project

Kaplan College in Davenport, Iowa, was fortunate to be selected as one of the original participants in the Department's Distance Education Demonstration Program, which is ongoing. Since the project was authorized in the 1998 reauthorization of HEA, it is due to expire. Our participation has allowed us to serve students whom we might not otherwise have reached, and we believe that the positive experiences of participating schools can serve as models to enhance distance learning. We urge that the project be reauthorized, and extended if necessary in advance of reauthorization to ensure continued service to students.

The 90-10 Provision

The requirement that proprietary schools have at least 10 percent of their revenues from sources other than student aid funds had understandable origins and long ago had its intended impact. Fly-by-night schools who fleeced students and left taxpayers to pay for defaulted students loans were shut down by this provision, along with the reliance on cohort default rates as criteria for participation in student financial aid programs.

Today's responsible for-profit schools, such as those in Kaplan Higher Education, are integral components of the higher education system in our country; 21st Century postsecondary education is a far different landscape from the circumstances that led to the creation of the 10 percent requirement. However, the provision remains in effect and has become overly burdensome from the institutions' perspective. We would prefer to redirect administrative resources to counseling and serving students. We would urge that the requirement be lifted, or at a minimum, that it no longer be a criterion for eligibility for student aid funds.

Thank you for the opportunity to testify and to have my entire statement included as part of the official hearing record. I would be pleased to answer any questions you may have.


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Last Modified: 02/20/2009