|
Opinion: December 11, 1996
How federal bureaucrats killed Detroit's last trade school for auto mechanics BY WILLIAM C. CARSON '50 The aspiring auto mechanic was expressing his own frustration about the loss of his best chance to secure a future, but to me it summed up perfectly the attitude the education bureaucrats in Washington had shown toward us for years. I had operated MCI and been its primary owner since 1979. To recount its demise is to expose the hollowness of the popular national rhetoric about getting people off welfare, about giving them the opportunity and the tools to get jobs. It also reveals the manner in which the policies and regulations of the education department discriminate against trade schools like MCI-the very institutions often best positioned to help many would-be and actual welfare recipients train for and find jobs as mechanics, medical or dental technicians, and the like. Not everyone can or should pursue an Ivy League degree; the thousands of for-profit trade schools play an important role in our country's educational system and deserve fair, understanding treatment. The backdrop for our struggle was the public outcry in the late 1980s over high student-loan default rates at certain vocational and technical schools. The basic story, as the media reported it, was that the profit-hungry owners of these private institutions were milking federal loan programs for everything they were worth, without providing much useful education in the process. Traditional two- and four-year institutions complained, meanwhile, that the unworthy for-profit schools were siphoning loan and grant money away from them and their more deserving students. Congress sprung into action, enacting new provisions in the Higher Education Act aimed at stemming the abuses. Relying on loan-repayment rates as a proxy for school quality, the new approach denied federal aid to students attending schools that failed to meet a minimum standard for loan-repayment rates and financial stability. Unfortunately for MCI and other schools like it, scant attention was paid to the economic realities of the areas where many of us were located and the students who were earning our certificates. You don't need a Ph.D. in economics to realize that poorer students will have a harder time paying back loans than more affluent ones. At the same time, decreased funding for grants was putting more pressure on students at all levels to take out loans, thus increasing the likelihood of defaults at all levels. MCI found itself in a tough place, literally and figuratively. Despite the general deterioration of Detroit and the neighborhood around our school, I made the decision in 1988 to stay in the city and not retreat to the suburbs, as so many other businesses had. We spent half a million dollars renovating our facilities on Gratiot Avenue and continued training Detroit's next generation of auto mechanics. MCI was an anchor in a community largely adrift. We trained several hundred students a year, and this was help in a place where help was desperately needed. Eighty-five percent of our student body qualified as "low-income"; the same percentage needed to borrow some portion of their tuition. Two-thirds of our students were black. Many MCI students were not only potential welfare recipients, but prison prospects as well. More than 20 percent of our students had some previous involvement with the criminal-justice system. If placing students in jobs is the measure of success-as Education Department regulations say it is-we were successful indeed. In 1993 and 1994, for example, more than 82 percent of MCI graduates found jobs as auto mechanics. From 1992 to 1994, we filled 569 full-time positions. Employers had faith in us and our students; on the day we closed, our placement department had more than 500 unfilled job orders from 323 employers. We could survive the difficult circumstances of Detroit, but not the onslaught the Department of Education had in store for us. Our trouble started when the department began holding trade schools like MCI accountable for student-loan repayment rates, despite the fact that such schools neither disburse nor collect the funds. The basic rationale was that students from a "good" school would pay back their loans and that students from a "bad" school would not. In 1991, MCI discovered an extraordinary number of errors in the data upon which the department was calculating our 1989 default rate. Government officials reported a 47.2 percent rate, while our figures indicated a rate of 18.6 percent. We began a costly and time-consuming appeals process that eventually proved us in the right. In 1992 the department acknowledged that its published rate for MCI in 1989 was invalid. Yet the pattern repeated itself with default rates for the ensuing years as well. Cumulatively for the three years from 1990 to 1992, the department's published default rate for MCI was roughly twice what we found, on checking, to be the actual rate. We again appealed-at great expense in time and money-but this time the department did not respond. Meanwhile, fighting the bureaucracy was taking its toll on MCI. We spent $225,000 appealing the department's inflated default rates. That, combined with an even greater amount consumed by program reviews, new regulations, audits, and other forms of red tape, cost MCI more than $500,000. It wore us down. MCI lost money in 1994 for the first time in the 16 years I had co-owned it. That loss, brought on largely by the department itself, became the basis for the regulators' "Catch 22" decision in 1995 that MCI was too weak financially for our students to merit federal aid. We were finished. Breaking the news to our students was a grim task. They took it hard. One young woman, who had previously told instructors that MCI was the only thing that had ever meant anything to her, broke down and sobbed on the chief instructor's shoulder. Someone else remarked that MCI and prison had been the only sure things in his life. Since that day, I've wondered about him, as I've wondered about the young man who cursed "education" as he walked out MCI's door for the last time. Once we closed, not a single auto-mechanics trade school remained in operation within the city limits of the automotive capital of the world. We worked with the Michigan Department of Education to try to help our students transfer to suburban schools, but clashing schedules and transportation problems proved insurmountable. In the hope that partial training might be better than none, we gave our students lists of available jobs and wished them the best. Perhaps the most telling testimonial about our contribution came six months later, when the Detroit Automobile Dealers Association contacted the city's job-training department about a severe shortage of auto technicians. The auto dealers wanted a training program established-another MCI, presumably. "To hell with education," indeed. What purpose was served by the closing of MCI? Is a lower default rate really worth the cost of shrunken opportunity? To be sure, some trade schools have abused student-aid programs in the past. I have always supported strong and realistic measures to crack down on their practices. But the regulatory response has amounted to bureaucratic overkill; little attention has been paid to the potential long-term human and economic costs to low-income students trying to become independent. MCI, of course, was just one small school in one city. But unfortunately, the same story has unfolded at similar trade schools around the country, leaving holes in other communities and the career paths of their low-income residents. If America really wants to lift its low-income citizens off welfare, it must recognize and support the contributions of for-profit trade schools. Federal programs should measure their success realistically-and be counted on to help, not hinder, their efforts. William C. Carson '50 lives in Santa Fe, New Mexico.
|