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Posted at 02:44 PM ET, 04/07/2011

Maryland moves to regulate for-profit colleges

Maryland’s General Assembly has passed the state’s first bill to regulate for-profit colleges, a sector already targeted by proposed federal regulation to curb overzealous recruitment tactics and academic programs that leave students with too little income and too much debt.

The bill puts Maryland in the vanguard of state measures — indeed, all measures — to tighten regulation of for-profit colleges, and it is said to be among the most far-reaching of state regulatory measures. More than a dozen federal regulations introduced last year await action by Congress. Gov. Martin O’Malley (D) is expected to sign the Maryland bill into law.

Authored by Prince George’s educator and Democratic state Sen. Paul Pinsky, the Maryland bill would grant Maryland’s Higher Education Commission authority to regulate the growing for-profit sector, in which The Washington Post Co. is a major player with its Kaplan division.

The legislation would prohibit the payment of commissions, bonuses or incentive payments to recruiters. A federal investigation last year found examples of recruiters pitching their for-profit schools to prospective students with hard-sell tactics akin to those of telemarketers. (The GAO report has since been attacked and revised but, to my knowledge, not discredited in any fundamental way.)

To a much greater extent than nonprofit colleges, for-profits are driven by a business model that stresses bringing students in the door. Retention and completion are, comparatively speaking, secondary goals.

Pinsky’s bill would also set up a fund to reimburse students in the event a for-profit college breaches a contract. It would phase out state-funded student aid. And it would require schools to notify students if they start a program without an “affirmative recommendation” from the higher education commission.

Several other states have enacted their own regulations for for-profit schools rather than await the conclusion of the federal crackdown. This page lists several, but I am told several more states have jumped in with bills this year.

By  |  02:44 PM ET, 04/07/2011

Categories:  For-profit colleges, Marketing, Public policy | Tags:  Kaplan, for-profit colleges, Maryland

 
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