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Advocacy / For Profits 

HACU Position Paper: HACU Opposes Adding For-Profit Category for HSIs

October 2003

Issue:

The House Committee on Education and the Workforce will again introduce legislation to provide proprietary (for-profit) institutions of higher learning access to Title V (Hispanic-Serving Institutions) and Title III-A (Strengthening Institutions) grants under the Higher Education Act. Current law limits the participation of proprietary schools to student aid programs.

The Hispanic Association of Colleges and Universities (HACU) urges Congress to reject this new effort to include for-profit institutions in forthcoming HEA reauthorization legislation.

Rationale:

  • This proposed addition of a new category of “for-profit” Hispanic-Serving Institutions (HSIs) would immediately dilute access to already inadequate Title V funding for HSIs by dramatically increasing the numbers of institutions eligible for Title V funding.
  • This proposal would grant non-student aid funds to a category of institutions not required to meet the same accountability standards as not-for-profit institutions to their communities or the larger public.
  • Such funds ultimately would serve only to increase owner/investor profits for proprietary schools.
  • This proposal would also dilute access of HSIs to programs outside the jurisdiction of the HEA, but which derive program eligibility from definitions within the HEA, such as the Carl D. Perkins Program.

Background

HACU recognizes the education services provided by many proprietary or for-profit institutions. However, they should not be allowed to compete for limited federal grant set-aside funding for strengthening and developing not-for-profit institutions, especially already under-funded HSIs.

Proprietary schools, by definition, are committed to earning funds for owners and shareholders in addition to serving students. Not-for-profit colleges and universities do not have the same access to private capital as proprietary institutions.

Approximately 242 colleges and universities currently meet the requirements of a 25 percent minimum Hispanic student enrollment definition of HSIs. If the proposed “single definition” category were added, more than 110 for-profit HSIs immediately would be eligible to also compete for Title V funds.

HSIs, as currently defined, continue to receive on average only about half the federal funding per student compared to every other category of not-for-profit institution of higher learning. Increasing the number of “eligible” HSIs by 50 percent would only dramatically widen this fundamental funding gap.

Previous legislation (H.R. 3039) was rejected by this Committee specifically because of the undesirability of including “for-profit” schools in a “single definition” for eligibility.