S.5598 (Thomas)

STAFF CONTACT :

Director, Workforce Development
518.694.4465

BILL

S.5598 (Thomas)

SUBJECT

Relates to Unlawful Unfair Practices of Proprietary Institutions of Higher Education

DATE

Oppose

The Business Council of New York State, Inc. strongly supports institutions of higher education that are preparing the workforce for well-paying careers. As such, it opposes S.5598 (Thomas) which would subject proprietary colleges to civil actions for very poorly defined “unfair” practices. 

The proprietary college sector in New York has been working with business and industry on education, training and skill-development for over a hundred years. To target a group of colleges based on how they were founded demonstrates the misunderstanding and stigma of the structure of proprietary colleges. Many of these institutions in New York were founded over a hundred years ago and are family-owned education institutions. As such, they are privately owned and never pursued a non-profit status as many other private institutions have. 

Given that they do not have a non-profit status, they are also taxpayers and contribute to state and local revenues. With the State’s concern about revenue and municipalities on already tight budgets, transitioning a whole sector of institutions across the state from for-profit taxpayers to non-profit tax-exempt organizations is not financially wise. In addition to such a transition being a complex and long process for the institutions, there will be an adverse economic impact on state, local, and school budgets.

All institutions of higher education in New York are subject to the New York State Education Department’s (SED) rigorous standards for accreditation (some of the highest in the country) which all the State’s for-, non-profit, and public colleges and universities are governed by. All the State’s institutions of higher education should be subject to the same regulations and governing laws. 

To treat any one of these institutions differently from the others demonstrates a clear bias with no evidence for such action being warranted. The for-profit sector in New York State which, on average, has lower student loan debt for graduates and higher degree completion rates1 is focused on student success as much as any other institution of higher education in the State. 

These schools know that student success means addressing all student needs, and proprietary colleges across the state are responding to student needs by opening food pantries and childcare centers on their campuses. 

From an industry standpoint, there is an unrelenting demand for “middle skilled” employees, those who have some post-secondary education but not a bachelor’s degree. This includes certificate programs and associate degrees. Across the state, many of these SED-accredited proprietary schools are successfully training an in-demand workforce vital to the economy. These schools have strong industry partnerships, and their primary challenge is that they cannot get enough students to fill the needs of local employers. Threatening these programs will be detrimental to the workforce and industry, especially in the most high-demand STEM careers. Healthcare, advanced manufacturing, and IT all have a high demand for middle skilled employees and rely heavily on certificate and associate degree programs. 

If the State Education Department has concerns about the quality and standards of the programs at proprietary colleges, or any accredited institution, there are ways to address and remedy them within SED. 

New York State has some of the finest institutions of higher education in the country and the world. SUNY, CUNY, for-, and non-profit colleges all serve New York residents in career and civic preparation, and all have a role in New York’s higher education landscape. Reducing the education options for students is a detriment to students who have many personal and familial considerations when making post-secondary education choices. 

Laws that disproportionately effect one sector of higher education over another are unnecessary and undermine SED’s oversight of all institutions of higher education. The State’s employers need more higher education partners to train and recruit skilled talent, and partner with all institutions of higher education to meet their workforce needs. As such, The Business Council strongly opposes S.5598 (Thomas), which would subject proprietary colleges to civil actions for very poorly defined “unfair” practices and make it harder for them to serve their mission of student success.


 


1 The average student loan debt for the Association of Proprietary Colleges is $22,357, compared to the statewide average of $30,931 [Source: US Department of Education, College Scorecard (https://collegescorecard.ed.gov)]. On-time (2-year) associate degree graduation rates in New York for Proprietary colleges: 26.8%; CUNY: 4.8%; SUNY, 13.1% [Source: New York State Education Department, 2016 Data].