How Betsy DeVos Is Taking Higher Ed into the Twilight Zone

In just about a month, the Education Department will gather a few higher education representatives--college officials, financial aid administrators, accreditors, a student or two--here in Washington, D.C. to rewrite some key higher education regulations. And while this round of negotiated rulemaking hasn’t gotten as much attention as other efforts from Secretary DeVos, some of the most consequential regulations underlying the federal financial aid system will be on the chopping block next year.

One of those regulations relates to the definition of a distance-education program. Beginning in the 1990s, federal law said that no college could offer more than half of its courses--or enroll more than half of its students--through correspondence education (by mail or online). At the time, Secretary of Education (and now chair of the Senate education committee) Lamar Alexander wrote to Congress that the Department supported the restrictions because “there have been many instances of student aid abuse involving correspondence courses.”

But in 2005, following the conclusion of an online-education pilot project run by the Education Department, Congress decided to change the law. So-called “distance-education” programs would be exempt from those restrictions and eligible for full federal financial aid, while “correspondence programs” would not. The dividing line, Congress decided, was that distance-education programs had to offer regular and substantive interaction between students and the instructor, while correspondence programs did not. The language was recommended by then-Education Secretary Margaret Spellings, who suggested the language in a report to Congress in 2005, nothing that “our concern is that the current definition could be interpreted to allow a correspondence school to qualify for full participation in student financial assistance programs by introducing even a very limited amount of email contact between students and a grader or instructional assistant with or without subject matter expertise into what is essentially a correspondence course.”

That caution was well warranted. From the earliest days of federal aid eligibility for college under the GI Bill, unscrupulous correspondence programs generated some of the worst abuses of students and taxpayers ever seen, a new report authored by David Whitman and released by New America today finds.

The report, The Cautionary Tale of Correspondence Schools, details decades of abuses, often precipitated by federal policymakers’ efforts to deregulate in the name of innovation. Under the GI Bill, hundreds of thousands of veterans enrolled in correspondence courses; only about one in 10 completed their programs, and many reported that they never used their correspondence training in their work. Later, with the opening of federal financial aid for all students through passage of the Higher Education Act, the problem metastasized, as some correspondence schools engaged in predatory recruitment tactics to grow to tens of thousands of students apiece despite high dropout rates and poor academic quality.

Perhaps the most infamous of these is the Famous Writers School. Here’s one of their ads: Rod Serling, creator of the Twilight Zone, promises that “there are many talented people all over the country who could write well--write successfully--if they had the proper guidance.” He assures viewers that “the real core of the Famous Writers instruction is the personalized attention we give each student.”

But as Whitman writes in our new report, The Atlantic’s Jessica Mitford found the truth was very different. In reality, the school had aggressive sales tactics that Bennet Cerf--chair of Random House and one of the school’s 15 “guiding faculty” alongside Rod Serling--described as “an appeal to the gullible,” noting that “if anyone thinks we’ve got time to look at the aptitude tests that come in, they’re out of their mind!” Another of the guiding faculty explained that the school’s entire business model depended on the fact that about 90 percent of students dropped out, noting that “we couldn’t make any money if all the students finished.”

Then there was Pioneer Schools. As Whitman writes, it was a “correspondence school that offered a course in how to start your own mail-order correspondence school.” An investigative reporter wrote in to Pioneer Schools, asking how he could start a mail-order course in skydiving, “the most preposterous subject he could think of to teach” in a home study course. The school wrote back that it would be happy to design the course, suggesting that “seven lessons would suffice.”

Unfortunately, these weren’t merely isolated incidents. The problems continued… and continued, and continued. Veterans and servicemembers were the ones most often fleeced, and likelier to be enrolled in correspondence programs than civilian students. Advance Schools, Inc., for instance, enrolled more than 51,000 GI Bill students alone. It employed 1,400 salespeople who traveled the country enrolling students, but only about 35 instructors, leaving a ratio of teachers to students of around 1:1,800. The scale of the problem was significant -- and costly.

Finally, in 1992 Congress cracked down on the uses of federal student loans and Pell Grants for poor-quality programs. That’s when lawmakers added the restrictions on financial aid access and enrollment in correspondence programs, eliminating the possibility of an entirely-correspondence school accessing taxpayer dollars in an effort to avoid some of the worst abuses of the past. Those restrictions are still in place today for correspondence programs, while distance-education programs face none of those limitations as long as they ensure students have regular and substantive interaction with their instructors.

It’s not entirely clear how the Department of Education plans to change the rules now. But the tightrope between correspondence education and distance education is a narrow one, and that balance could be easily upset. It’s not hard to envision a recurrence of these abuses in the already-fraught world of online education. So pay attention to the upcoming rulemaking on distance education: Your tax dollars--and students’ lives--are on the line.