Secretary Arne Duncan
U.S. Department of Education
400 Maryland Avenue Southwest
Washington, DC 20202
RE: Proposed "Gainful Employment" Rule: Docket Number ED-2010-OPE-0012
Dear Secretary Duncan:
I write in response to the Department of Education's "Program Integrity: Gainful Employment
Notice of Proposed Rulemaking (NPRM)." As a member institution of New York’s APC-
Colleges, I personally, and USC, institutionally, concurs with the comments as submitted by the
Association.
I will comment, not from a legal standpoint, but from the perspective of the president of a small,
family owned, proprietary college and will begin with some history and background.
The Utica School of Commerce was founded by my great grandfather, Thomas J. Risinger, on
September 14, 1896; one hundred and fourteen years of continuous family ownership and
leadership. I am proud to be the fourth generation president and my son, Scott, is now the fifth
generation represented at USC. Our college is solely owned by my cousin, John L. Crossley,
Executive Vice President of Administration, and me. Our Board of Trustees has been ably
chaired by Dr. Peter J. Cayan, President Emeritus of SUNY College of Technology, aided by
Vice Chair, Rober E. Galliher, past President of the New York State Association of Realtors, and
New York State Appraisal Board.
Throughout our history, our students make USC what we are today. Our students, as successful
alumni, demonstrate that we uphold our mission. Our students excel in all walks of life. We are
proud to have had U. S. Senator Irving Ives, who attended USC while also attending Hamilton
College. Currently, congressional candidate, Richard Hanna, a successful businessman, is a
former USC student. This year, Marianne Reynolds, a 2008 USC grad, received one of the Utica
YWCA’s Salute to Outstanding Women awards. In 1997, Cathy M. Newell, a 1972 graduate,
received the same award, and in 1992, USC Trustee, Dr. Marie Russo, received this award. Not
bad for a small college of less than 500 students. Awards such as these are wonderful, but the
true accomplishments of our alumni are played out day to day by the on-the-job work of each
and every former USC student, whether or not they have won an outstanding award or are
participating in national politics.
I truly am appalled by the development of the “Gainful Employment” regulations. What really
do you want to accomplish with these regulations?
Are the national and regional accrediting agencies not doing a sufficient job as watchdogs? If
not, regulate them effectively. We in New York, under the Board of Regents, have a very
effective State Education Department that has rules and regulations that are applicable to all
institutions of higher education whether or not they are accredited by the Board of Regents. It is
my opinion that the Department of Education could use the New York State Education
Department as a model.
Is there a problem with proprietary education? I use proprietary rather than for profit purposely.
Yes, our college is privately owned and, as such, is organized to make a profit. I can tell you that
there are few family-owned colleges where sacrifices aren’t made by the owners to see the
success of the college. Several years ago when we merged our Board of Directors and Board of
Trustees into one Board of Trustees, one of our Trustees remarked that she sure couldn’t see
giving up financial power of her business to a Board of Trustees. Well we have, as have the
majority of proprietary colleges, still, however, with owner’s making sacrifices.
If the problem is with publicly traded institutions, the answer, to me, is quite simple. Yes, under
SEC rules the entity is duty bound to make profits for its investors, but why not develop investor
disclosures such as are required for public utility corporations which speak to the public good?
Remember, those of us in proprietary education pay taxes. Our students receive public dollars,
just as in other colleges, but we received no public money. There are three types of institutions
of higher education. First, you have the tax using colleges, the public colleges. These use
taxpayer monies to survive. Second, you have the tax avoiding colleges, the non-profit colleges.
Tell me a successful non-profit college that doesn’t make a profit? The reality is they all have
positive fund balances. Finally, you have our sector, the proprietary sector, organized to pay
taxes on our profits. There have been many comments posted that delineate the dollars generated
and I will not duplicate these remarks.
Lastly, I want to address the concerns I have on the administration of the proposed rule. USC,
with under 500 total students at its main campus and two branches, is a very small college. In
recent years we have had as few as one loan per program. In fact, in the 07-08 year we had only
one program with loans in double digits. Obviously, a default or two in a single program could
deem a program unfit. This is unacceptable.
Income determination is also flawed. First, it has been shown that the percentage of 8% is
arbitrary and not necessarily correct. What about total family income being used? I also find it
totally unacceptable that we have to accept the government’s determination of income without
any way of proving it correct or incorrect, no matter what income is used. Has anyone figured
out that it costs more to live in New York City than it does in Utica, and therefore what may be a
purely subsistence income in New York could be a good income in Utica?
For years the Department of Education has encouraged our financial aid professionals to
encourage our students to consolidate loans, and seek deferments and forbearance. This has been
the standard acceptable and encouraged practice. Now, this counts against us. We have an
excellent loan default management program which has resulted in excellent default rates for our
college. However, under your statistics, we look terrible, for those very practices that are
encouraged by the Department now are hurting us. Put them back. Also, pardon the pun, what
about PUT loans. Where do they fall?
For 114 years, as I have said, the success of our college has been based on the success of our
students. Placement has been and always will be most important to USC! However, no matter
how hard we try, in these economic times, the worst since the Great Depression, placement may
not be as good as it was ten years ago. Yet, it is in these bad times that the Department wishes to
promulgate these rules. Yes, we proudly educate for employment and transfer, but what about
those colleges that educate for careers in education. How many elementary education graduates
are immediately employed as elementary teachers? How many English teachers are teaching
English? I know of a two-year college that, last year, had 150 applications, many of them PhD's,
for one full-time faculty position.
Our college stands on its record. No, like any institution or person, we are not perfect. We
continuously strive for improvement and seek to have our programs best fit, not only the jobs of
today, but the jobs of tomorrow. I could go on and on about our successes, but deem brevity
best.
As President of the Utica School of Commerce, and an institutional member of APC Colleges, I
support the comments of APC-Colleges as submitted. I ask that favorable consideration be given
to small institutions, especially those whose cohort numbers per program are so small that they
do not comprise a statistical sample. I ask that loans that are consolidated, deferred, PUT, or in
forbearance, be considered for the calculation. Finally, I ask that cost of living be considered as
well as total family income.
Respectfully,
Philip M. Williams
President
Utica School of Commerce