Interim Joint Committee on Licensing and Occupations


Minutes of the<MeetNo1> 1st Meeting

of the 2011 Interim


<MeetMDY1> June 10, 2011


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Interim Joint Committee on Licensing and Occupations was held on<Day> Friday,<MeetMDY2> June 10, 2011, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Representative Dennis Keene, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator John Schickel, Co-Chair; Representative Dennis Keene, Co-Chair; Senators Julian M. Carroll, Julie Denton, Denise Harper Angel, Jimmy Higdon, Paul Hornback, Dan "Malano" Seum, Kathy W. Stein, Damon Thayer, and Robin L. Webb; Representatives Tom Burch, Larry Clark, Dennis Horlander, Wade Hurt, Charles Miller, Mike Nemes, Darryl T. Owens, Ruth Ann Palumbo, Carl Rollins II, Sal Santoro, Arnold Simpson, and Susan Westrom.


Guests: Crit Luallen, Auditor of Public Accounts; Jack Conway, Attorney General, Todd Leatherman, Director of Consumer Protection, Patrick Hughes Chief Deputy, Dana Nichols, Assistant Attorney General Ė Civil, Ryan Halloran and Della Justice Assistant Attorneys General; Shannon Tivitt, Executive Director, Division of Occupations and Professions; David Keene, member, Kentucky State Board for Proprietary Education; Greg Brotzge, Kentucky Association of Career Colleges and Schools; Roger Dalton, Vice President for Government Affairs, National College; and Anthony S. Bieda, Director of External Affairs, Accrediting Council for Independent Colleges and Schools (ACICS).


LRC Staff: Tom Hewlett, Bryce Amburgey, Carrie Klaber, Michel Sanderson, and Susan Cunningham.


Proprietary Education Industry in Kentucky.

Auditor of Public Accounts, Crit Luallen, told committee members an audit report issued by her office dealt with the oversight role of the State Board of Proprietary Education and the administrative support that is provided to that board by the Office of Occupations and Professions in the Public Protection Cabinet. The issue of proprietary education and its oversight is a complex issue. Her office began the audit in January, 2011, based on reports in the media and a request by Representative Reginald Meeks, as well as a request from the boards then-executive director.


Ms. Luallen said the Board of Proprietary Education was created in 1976. It gets its revenue from licensing and other fees paid by proprietary schools that operate in Kentucky and issue degrees or certifications below a bachelors degree. In 1990, the General Assembly created a Student Protection Fund. The purpose of this fund is to pay off debts incurred by the closing of a school.


Ms. Luallen told the committee that the primary conclusion of the audit was that the State Board of Proprietary Education has not been adequately monitoring the proprietary schools that it oversees. The audit also notes numerous weaknesses in the Office of Occupations and Professions which collects the board's license applications, maintains a database of active licensees, issues license renewals and agent licenses, and processes reimbursements, claims payments and other expenditures on behalf of the board. The same staff provides support to twenty-one other professional boards.


Ms. Luallen said that the audit lists nine findings with 39 recommendations to ensure proper board oversight. Five of the findings rose to the level of a material weakness that could indicate serious non-compliance with state statutes governing the board. One finding involving the board calls for it to assess its operations and implement policies and procedures to insure that it is fulfilling its responsibilities. Another finding points to the need for the board to improve documentation and keeping adequate records and files; and its monitoring of existing schools, closed schools and schools, that are operating without a license.


Ms. Luallen said that the audit found at the time that there was no orientation program or manual for new or returning board members, and the board lacks a clear understanding of its role and responsibilities. The board should keep more detailed minutes, should establish policies to handle complaints from students, and should schedule periodic external audits. Two of the material weaknesses in the audit concerned the Office of Occupations and Professions. The audit revealed that the agency does not consistently keep original documentation, has had a high turnover in leadership, and does not properly monitor expenditures and revenues from license fees for the board.


Ms. Luallen said the audit reviewed internal controls over the student protection fund that the General Assembly created. The regulations and board policies for that fund are weak and that the staff has inadequate training to administer the fund. There are 70 pending claims before the board regarding the closing of Decker College. None of those claims has been paid, and the student protection fund has a positive balance. The audit suggests several ways to amend regulations in order to avoid complications in the future. The audit also made recommendations to replenish the fund because there is no process to replace money that is paid out by student claims.


Ms. Luallen told the committee that, if the audit's 39 recommendations are implemented, there will be improvement in board oversight and governance, and the administrative support offered by Occupations and Professions will be enhanced. More importantly, there will be more protection provided to the students. The board's formal response has been added to the audit, with each finding including the board's response and plans for corrective action. There have already been a number of steps taken since the audit was published. A new director of Occupations and Professions has been appointed, a board chairman has been elected and a commitment to follow recommendations has been established. It was important to ensure that every educational resource was available and functioning effectively to get students through educational programs that can further their opportunities in this economy. It was important for the board to protect the students, but it also has to protect reputable proprietary schools from unfair competitive practices of dishonest or disreputable institutions.


Shannon Tivitt, Executive Director of the Occupations and Profession Office (O and P), said O and P administers general services for 23 of the 43 regulatory boards for the state. Duties include compiling meeting packets, completing board minutes, processing applications and license renewals, and administering exams. The office also handles budget management, accounting, maintenance of the board website and technology services. The office employs 16 staff, eight of which are board administrators while the other six handle the operations in the office. She said that the office helps the boards license over 20,000 individuals and businesses throughout the state each year. She became Executive Director on February 1, 2011. Her charge is to identify and strengthen the functions of the office and to improve the day-to-day operations. The Auditorís recommendations provided a road map to make the operation of the office more effective and efficient for the boards. The relationship with the boards is unique in that they are independent authorities and O and P oversees their administrative operations. Her top priority was to establish policies and procedures for the office. About half of the Auditor's recommendations are board functions with about half O and P operations. The board and O and P have been working with the auditors. Executive staff from the Public Protection Cabinet will provide some oversight in implementing the corrective action plan. She has received approval to reorganize the office into sections and to restructure management to ensure leadership. The Attorney General's office was helping with training sessions for staff members regarding open meetings, open records, and customer service. In the future, O and P will have a service agreement with all the boards as well as formalizing agreements between the boards and O and P. Board members are being advised to attend ethic's training. Later in the year, a new database will be implemented that will help record keeping and reporting to the boards.


Ms. Tivitt said the board of Proprietary Education has hired a new legal counsel who is in the process of overseeing audit recommendations such as reviewing administrative regulations, in particular recommendations relating to the student protection fund. The council is creating policies and procedures for this board to adopt. While the audit was particular to the proprietary board, she will use the recommendations as a road map for improving the operations of the other 23 boards. She was confident that O and P was moving in the right direction to provide services to the boards and she felt that the boards would see a positive improvement in these services.


In response to a question from Representative Larry Clark, Ms. Tivitt said there is a board investigator who travels around the state to inspect sites during the application or renewal process.


In response to Senator Kathy Stein, Ms. Tivitt said the board has 11 members appointed by the governor from a list of recommendations sent by the Kentucky Association of Career College Schools. The board has five members representing the public at large, three members representing privately owned educational institutions, and three members representing privately owned technical schools. The board is currently short one member representing privately owned schools. Additionally, there are 20 independent boards, and O and P has a unique relationship with the 23 boards for which it provides administrative assistance. She has sent a memo to the boards regarding FY 12 and feedback she has received has been positive. In response to Senator Stein's comment that Judge Shepherd, Franklin County Circuit Court had issued an opinion on the constitutionality regarding the General Assembly "sweeping" funds that were not intended to be used for general purposes, Ms. Tivitt declined to comment, stating that the state budget directors office should be monitoring the case and would be better able to respond.


In response to a question from Representative Burch, Ms. Tivitt said that the Kentucky Proprietary Education Board was responsible for auditing schools. Brenda Allen, Council for the Board of Proprietary Education, added that one of the board's responsibilities was to ensure that each school was financially able to operate. She said the board has the authority to look at a school's financial records at any time. The board has authority in statute to request a school's financial statement and their profit loss statement, certified by an independent accountant, to make sure that the school is operating in a financially sound manner. David Keene, board member, said that when a school received state grants, it must be an accredited institution and that schools receiving Title IV money are required to be audited annually by the federal Department of Education. Senator Harper-Angel told committee members that, when she was PVA of Jefferson County, Ms. Tivitt was her Chief of Staff and is very capable of carrying out all the Auditorís recommendations.


In response to a question from Representative Owens, Ms. Allen said that the board meets monthly with an agenda set by the chairman. In response to a question by Representative Keene, Ms. Tivitt said that there is a combination of industry, professional and public at large members on all 43 boards. In response to a question from Representative Clark, Ms. Tivitt said that board recommendations cover the two year and four year degrees in the split between privately owned technical school members and privately owned school members. In response to a question from Representative Westrom, Mr. Keene said that schools can be corporately owned, publically traded or individually owned.


Jack Conway, Attorney General of Kentucky, said that the Consumer Protection Act charges his office to uncover, penalize, and correct false, deceptive, and misleading business practices. He said that is the focus of an investigation into proprietary schools that is ongoing and, due to the ongoing nature of this investigation, his comments will be limited to what is already publically available. A large part of this investigation involved uncovering deceptive recruiting tactics the schools are using. As an example, he discussed how recruiters are trained to target potential students. Recruiters focus on the emotion of the potential student and explained that one recruiting manual employs the sales module known as the "pain funnel" to create a sense of urgency to make a change. School recruiters also profile potential students, targeting welfare moms with children, freshman dropouts, and people with recent life-changing crisis such as divorce or death.


Mr. Conway said that his office has an obligation to monitor the issue for the good of the proprietary schools who are doing good work. There are schools that have developed associations with employers to provide jobs after education. Civil Investigative Demands (CIDs), which are essentially requests for information, have been sent to only seven of the 141 proprietary schools in Kentucky.


Mr. Conway also said that his office has intervened to block collections by bankruptcy trustees to collect approximately $4 million in student loans in the 2005 failure of Decker College. He is working with Ms. Tivitt to ensure that the proper claims papers are being filed so that former students of Decker College can receive funds from the student protection fund. Mr. Conway said that, in 2008, the American Justice School of Law in Western Kentucky failed to obtain accreditation from the American Bar Association. Students of that school had acquired about $7.5 million in debt through Student Loan Express. His office has investigated and entered into an agreement with SLX to forgive approximately $3.6 million in loans. This amount equals 100 percent of the amount of credits that could not transfer to other ABA accredited institutions, as well as about 10 percent of living expenses. Mr. Conway told members there is one other active investigation that has not been named.


Mr. Conway said that, looking at the concerns of the Government Accountability Office and the U.S. Senate Education Committee regarding the for-profit industry, he decided to investigate this industry in Kentucky from a consumer protection standpoint. There are four criteria for beginning an investigation on a particular school: complaints from students and others; the schoolís type of accreditation; recruiting and advertising practices; and federal student loan default rates. The type of accreditation is important because it relates to how easily credits transfer. Kentucky's public universities are regionally accredited by the Southern Association for Colleges and Schools (SACS). Nationally accredited schools have a harder time transferring school credit hours. This is a concern from a consumer protection standpoint.


Mr. Conway told committee members that there was a multistate group of Attorneys General working collaboratively to investigate schools that are using deceptive tactics to increase enrollment at their schools. Common complaints are failures to provide a real or adequate education, credits that do not transfer, over-promising job opportunities, misinformation about the cost of the program and debt incurred, and improper handling of public student aid. Of the six schools with CIDs issued in December, five are cooperating and producing the information requested. One school has challenged the office's authority to issue a CID in Franklin Circuit Court and is seeking anonymous cover in the suit. The court has dismissed the motions to limit the Attorney General's authority and has ruled that this investigation is in the public interest.


Mr. Conway said proprietary education is a big dollar industry, where nine-tenths of the funding is coming from federal education dollars, as well as state education dollars. According to the U.S. Department of Education, there has been large growth in the for-profit college industry in the last ten years. Federal funds going to proprietary schools have more than doubled since 2006, including Pell Grants, Stafford Loans and other federal funds. For-profit schools received $30 billion in Pell Grants and Student Loans in 2009. For-profit schools account for 25 percent of the federal student loan dollars with half of those loans ending in default. Mr. Conway added that 1.2 percent of the money that proprietary schools receive comes from the Kentucky's College Access Program (CAP) and the Kentucky Tuition Grant (KTG), a need-based program administered by Kentucky Higher Education Assistance Authority (KHEAA). Need-based programs have in the past been oversubscribed by approximately 190 percent. Students received letters telling them they qualified for student loans but some KHEAA programs were not able to pay sufficient money due to declining state resources.


Mr. Conway said there is a distinction between a private non-profit and a private for-profit school. There is a discrepancy in the cost for degrees between for-profit and the not-for-profit sector. For a business management bachelors degree, the average for-profit cost is about $60,000, while at the University of Kentucky the cost is about $34,000. The cost of a medical billing diploma at a community college is approximately $3,000, while the cost for the same diploma at a for-profit school is about $14,000. Some students are non-traditional, and some students need the ability to take classes on-line that are often provided through proprietary schools. However, he feels that he has a duty, as a public servant, to ensure that students are told about the total cost, the potential debt burdens and all options available. Mr. Conway noted that federal student loan debt is not dischargeable in bankruptcy court.


Mr. Conway said that information provided to the U.S. Senate Education Committee from the major publically traded schools (Apollo Group, Inc., Education Management Corporation, Corinthian Colleges, Inc., Kaplan Higher Education, Inc., and ITT Educational Services, Inc.) regarding resources devoted to recruiting versus student services and career placement from 2007 to 20010, shows the number of students doubled. To achieve this, the schools employ about 22,000 recruiters but only 1,700 job placement staff. The for-profit school industry is very lucrative, generating a nearly 52 percent profit margin. On a per student basis, the largest amount of money is devoted to recruiting and profit.


Mr. Conway said there are concerns based on what his investigation has found. Students see these schools as a gateway to better employment opportunities. Information from the schools regarding employment after graduation has been inflated. There is a federal rule that no more than 90 percent of revenue can come from federal resources, and the proprietary industry is currently at 86 percent. Some proprietary schools in Kentucky do an outstanding job. There are 141 programs that cover barbering, cosmetology, and two and four year programs. However, there are some legitimate concerns, and his office, under the Consumer Protection Act, can do right by the people of Kentucky.


In response to a question from Senator Carroll, Mr. Conway responded that one school has not been responsive to the civil subpoena but has gone to Franklin Circuit Court and requested anonymity. Franklin Circuit Court dismissed the request, and the school has appealed to a higher court. In response to a question from Representative Palumbo about the accredited data, Mr. Conway said the U.S. Senate Education Committee has not revealed names of schools included in their analysis of federal and state grants and that the schools are not necessarily in Kentucky. In response to a question from Representative Westrom, Mr. Conway said that because the investigation was ongoing and the school had asked Franklin Circuit Court for anonymity, he would not name the national school that was not cooperating. The school was present and intended to come before the committee. In response to another question about student loans, he said that getting a co-signer was particular to each contract signed. In response to a question from Senator Stein, Mr. Conway said that some schools have preferred lending arrangements, which are nondischargeable in bankruptcy, with companies such as Student Loan Xpress (SLX).


In response to a question from Senator Webb, Mr. Conway said the U.S. Senate Education Committee has provided information regarding the predatory practices of some proprietary schools. As the investigation becomes more complete, his office will come back to the committee with information. In response to a question from Senator Denton, Mr. Conway said there has been debate at the federal level regarding the Gainful Employment Rule that will allow the Department of Education to monitor which institution's students are working after graduation. Regarding the subject of credit transfers, he said there are problems due to accreditation of the schools. Mr. Conway said that the proprietary schools are targeting non-traditional students.


In response to a question from Senator Higdon, Mr. Conway said his current investigation is a formal civil investigation. He will supply Senator Higdon with information regarding associate degree retention numbers. Senator Thayer commented that he had not had complaints from his constituents regarding proprietary education and felt that these institutions were providing a valuable service with job training and placement for this economy. Senator Thayer further stated that he questioned why this investigation had been given higher priority than other investigations. Mr. Conway responded that he views his role as the Attorney General to encourage good corporate citizenship, and the fact that there are only seven subpoenas out of 147 schools shows that he is focused on schools that are not fulfilling their commitments.


Greg Brotzge, Government Affairs representative for the Kentucky Association of Career Colleges and Schools (KACCS), Anthony S. Bieda, Director of External Affairs for the Accrediting Council for Independent Colleges and Schools, and Roger Dalton, Vice President for Government Affairs, National College were present to speak to the committee. Mr. Brotzge told the members that KACCS is a voluntary association of career colleges and affiliated companies currently serving over 26,000 students in Kentucky. His association largely agrees with the Auditor's recommendations regarding the proprietary schools, and KACCS wants to work with the General Assembly to fix problems so that the schools are operating to the highest standards. Proprietary schools fill a gap in Kentucky's post secondary training for non-traditional students, in particular for those students who are already working. KACCS feels that they compare favorably with other sectors of higher education. There are legitimate concerns regarding proprietary education, and KACCS wants to be involved in all areas of the discussion.


†Mr. Brotzge said there is support in making changes to the Proprietary Board of Education. The number of school representatives should be reduced so that a majority of the board comes from non-school sources in order to increase public confidence in the board while maintaining the expertise school representatives provide. There were questions regarding placing associate degrees under the Council for Post Secondary Education Department (CPE). If the proprietary board follows the Auditorís recommendations and implements changes, there would be no purpose to move those degrees. Schools that offer bachelor's degrees and above are already regulated by CPE. For the most part, they are regulated by the same standards as other sectors of post-secondary education. A general concern is the inconsistency in regulations that apply to proprietary institutions and other post-secondary institutions. The legislation proposed in 2011 (HB 125) would have placed burdensome requirements on proprietary schools. CPE has an advisory council made up of the Presidents Council (consisting of the Presidents of the public universities), KCTCS, and the Independent College Association. Proprietary schools should be represented on this council also.


Mr. Brotzge said it has been suggested to KACCS that it change to regional accreditation to resolve the transfer of credit issue. KACCS feels that it should be allowed develop its own process by administrative regulations, giving the schools the opportunity to address problems first. KACCS believes that all schools should make the data reported to the Integrated Post Secondary Education (IPEDS) data system available in electronic form as well as part of the admissions process. This allows prospective students to compare graduation and retention rates. Whatever regulatory entity is chosen to oversee proprietary schools, it should have clear regulations regarding compliance as well as fair fee structures. Financial aid does not go to the school but to the student, and KACCS students are provided with a means to improve their career choices.


Anthony S. Bieda, Director of External Affairs, Accrediting Council for Independent Colleges and Schools (ACICS), stated that ACICS is the largest accreditor of independent colleges and schools in the country, with more than 870 institutions, in 47 states, and nine foreign countries. More than 25,000 students are enrolled in 26 institutions accredited by ACICS in Kentucky. The U.S. Department of Education has recognized ACICS as an authority on institutional quality and integrity since 1956, and at the degree granting level by the Council for Higher Education Accreditation (CHEA). Those two entities are the only two that have a formal process for reviewing the authority and capability of accrediting agencies, and they review accrediting agencies every five years. These agencies also review the regional accreditors including the Southern Association of Colleges and Schools (SACS). Unlike the regional accreditation agencies, ACICS does not accredit any college or school that is publically organized or supported. The average retention rate for ACICS accredited colleges and schools in Kentucky was 68 percent in 2010, well above the required 60 percent threshold. The average job placement rate was 69 percent. If a college or school falls below the threshold set by ACICS, it could lose its accreditation and access to student financial aid.


Mr. Bieda said in other countries there are Ministries of Education that do accreditation, student financial aid, and consumer protection under one agency. In the United States there is, by design, a triad: 1) the U.S. Department of Education, whose primary role is to provide supplemental resources for K-12, and college education. It has its own standards and requirements regarding the stewardship of that money and audit schools annually to ensure compliance; 2) the accrediting agencies, whose job is quality assurance and institutional integrity; and 3) the state-based regulatory authority that has primary responsibility for consumer protection. All institutions that ACICS accredits have a mission to educate students in a manner that prepares them for an occupation or career. These obligations are required by ACICS and the U.S. Department of Education.


Mr. Bieda said the difference between ACICS and SACS is the focus on curriculum, delivery modes, and instruction that prepare graduates to successfully enter and persist in the work place. ACICS accredited schools have detailed operating policies that enable them to meet or exceed the accreditation standards imposed. The regionals tend to be much more general and vague in order to enable the creativity that is appropriate for accrediting a liberal arts education. ACICS accreditation teams visit institutions every three to five years, versus regional accrediting teams at schools every eight to ten years. They review student records, faculty credentials, and student financial aid, and verify student placement and retention rates. When a career college has a program that is not placing students at the rate required, it should discontinue the program and create a new program that is more reflective of the workforce needs in that community.


Mr. Bieda said regional accreditors do not require that colleges or schools prepare their graduates for occupations and careers, nor do they prescribe detailed standards for curriculum or delivery modes, nor do they require employer advisory mechanisms. This does not make regional accreditors inferior to national accreditors, just different. Regional accreditors have authority from the Secretary of Education to accredit colleges in six geographic areas, but national accreditors have the authority to accredit colleges across the United States. ACICS has not seen any authoritative data to demonstrate transferring credits from a regionally accredited school to another regionally accredited school is any easier than transferring credits from a nationally credited school. Requiring regional accreditation for career colleges and schools that operate as career preparation institutions creates a mismatch between the accreditation expertise and the institutional mission and purpose, thus creating a disservice to students who choose to enroll in career colleges that best meet their needs.


Roger Dalton, Vice President for Government Relations for National College, told the committee that National College is a 125 year old institution of higher education founded in Roanoke, Virginia, with six campuses in Kentucky offering a mix of one year diplomas, two-year associate degrees, and baccalaureate degrees. All six campuses are under the oversight of the Council on Post Secondary Education. Students and their well-being and success are National College's top priority. Last year, 56 of 107 post secondary institutions in Kentucky were career colleges. Of those 56, 42 offer two-year degrees, 12 offer four-year degrees, and 2 offer workforce readiness programs that can be completed within two years. This is the reason that most of National College's students chose to enroll there. These students are independent adults who are working to support families while going to school. A key need for these students is flexible class scheduling to work around career and family schedules to enable advancement in their local workforce as quickly as possible. National College offers extensive career guidance and placement services.


Mr. Dalton said a study by CHMURA Economics & Analytics found that Kentucky's career colleges serve a niche of students who are underserved by traditional two-year and four-year colleges and universities. The study found that over half of career college students are over the age of 25, come from low to middle income households, and are minorities. Graduation rates compare equally with traditional, public colleges. These graduates make a vital difference in Kentucky's local communities, particularly in career fields that lack a trained workforce. Graduates hold degrees in health care support, business management, administrative support, and personal service occupations.


Mr. Dalton said that as career colleges continue to meet the needs in Kentucky's higher education and work force training environment, it is important to realize that national accreditation is a good fit for the niche National College fills. CHEA has issued a statement saying the accredited status of an institution is important, but not the sole factor to consider in transfer of credit decisions. Every regional and national accrediting agency has voiced agreement with that statement. SACS, the regional accreditor for Kentucky institutions of higher education, expressly states in one of its policy papers that the accreditation standards do not mandate that institutions accept transfer of credit only from regionally accredited institutions. Further, SACS encourages its institutions to consider ways to make the transfers easier. He felt it was in the best interests of the state and of the students for a receiving institution to provide a thorough and fair evaluation of credits that are submitted for transfer, rather than reject them based on the accrediting status. It costs the state and the student money to take or retake a course that could have transferred in.


Mr. Dalton said that career colleges are a significant economic driver for Kentucky, employing over 3,000 workers and generating an economic impact of more than $454 million, and more than $10 million in tax revenues. He is eager to work with them toward the betterment of all sectors of higher education.


Senator Schickel commented that in his district most of these schools were renting existing real estate that would otherwise be vacant and do not come to the General Assembly to request money for capital improvement.


In response to a question from Representative Rollins, Mr. Bieda replied that the requirements for faculty qualifications for nationally accredited schools are the same for all regionals, relative to general education requirements. Also, the faculty member must have a degree one level higher than the students they are teaching. Representative Rollins said that transferability between SACS and other regional accrediting agencies that are not quite as strict brought about legislation to require schools coming into the state to hold the same requirements regardless of their accreditor to be eligible for financial aid.


In response to a question from Senator Denton, Mr. Dalton replied that CHMURA took its data from the Integrated Post Secondary Education Data System (IPEDS), which is a federal system that holds education data such as graduation rates, retention rates, and placement rates. Mr. Brotzge added that the Attorney General's data was national and CHMURA data is state specific. Regarding costs, Mr. Dalton said that state subsidies factor into the cost. Whitney Smalls, researcher and data analyst, said that the amount in the CHMURA report was state aid and not state subsidies. Ms. Smalls said state appropriation is the amount of state aid the student receives from programs like CAPS. However, state subsidies are monies that are appropriated for those schools individually from the state budget. Mr. Dalton said that a national study conducted by Dr. Robert Shapiro, Harvard economist, found that it is more cost efficient for the taxpayer to produce a diploma from a career college than a public college. In response to a question from Senator Hornback, Mr. Dalton replied that the Gainful Employment regulation, which that has just been released, initially received comments stating that the regulation would be harmful to minority students and may close programs. The regulation was then amended. However, career college representatives still believe that the metric is flawed and punitive to their sector. Representative Horlander asked if the proprietary board could provide recommendations and forward information promised to the committee chairs in the form of a letter. Mr. Keene responded that was the primary goal of the board.


Representative Keene assured Mr. Dalton he would be included in discussions regarding future legislation.


Representative Keene asked the members not available for the August 12th meeting to let staff know.


There being no further business to come before the committee, the meeting was adjourned at 12:29 PM.