For-profit school coalition retreating from K Street lobbying

A prime player in the debate over for-profit schools has pulled back on its lobbying campaign.

The Coalition for Educational Success, an alliance of several for-profit schools, has parted ways with a number of lobby shops. The drawdown in K Street wattage comes after the Education Department offered a changed “gainful employment” rule last year that had originally stoked the for-profit school industry's ire but was later weakened in its final form, according to supporters of stronger regulation. 

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Penny Lee, the coalition’s managing director, told The Hill that in early 2012, the group decided not to ask its member companies to contribute further to its lobbying program.

“We just shifted emphasis. We suspended lobbying activities and didn't ask for further resources,” Lee said. 

Instead, the coalition shifted its attention towards the Foundation for Educational Success, an affiliated non-profit group, to promote and implement a set of self-regulating standards for the for-profit school sector. 

Lee — also president of Venn Strategies, which is registered to lobby for the coalition — said the group also suspended its public relations contract with the Harbour Group. 

Lee said the coalition formed in 2010 for two reasons: to challenge the “gainful employment” regulation and to draft standards for the for-profit school sector.

“It has gone about and has done both of those things,” Lee said.

The rule was issued in June 2011 while the foundation released its standards in September 2011.

The rule requires that for-profit schools show that their students are finding “gainful employment” so they can repay government loans. If schools fail to meet that standard, they could lose billions of dollars in federal aid.

Changes to the draft rule by the Obama administration, however, lessened its impact. The changes included delaying any cut off of federal funds until 2015 and requiring for-profit schools to fail to meet several benchmarks three years out of four before losing their eligibility for aid.

Barmak Nassirian, associate executive director for the American Association of Collegiate Registrars and Admissions Officers, said it made sense that the coalition has withdrawn from lobbying. Nassiran, a supporter of stronger regulation for the for-profit school industry, said they were successful in achieving their objectives.

“This simply means the moment of danger has passed for them. … They managed to push back quite effectively and they watered down the regs,” Nassiran said. “As Don Rumsfeld said, they ran out of targets.”

For 2012’s first quarter, Singer Consulting and Wexler & Walker Public Policy Associates filed termination reports for their work on behalf of the coalition, according to records. That followed the Raben Group, which filed a termination report for the end of last year.

The Raben Group was hired by the coalition to help with outreach to third-party groups, specifically Hispanic organizations, according to Estuardo Rodriguez, a principal at the firm. 

“That was precisely what we were hired to do. It was great but we were done by the end of last year,” Rodriguez said.

Lee’s firm, Venn Strategies, reported no lobbying activity last quarter. The coalition’s remaining lobby shop, Empire Consulting Group, appears to still be active and reported earning $30,000 last quarter, according to records.

The group was a big part of the lobbying effort by for-profit schools against the Education Department rule. The coalition spent more than $1.8 million on lobbying fees in 2011 but that spending has since dropped off.

The coalition only spent $190,000 this past quarter on lobbying — a significant drop from the $410,000 they spent in 2011’s first quarter, according to records.

One lobbyist who worked for the coalition said the group was formed to battle against the regulation.

“They were created for a specific need and that need no longer exists. The rationale for the existence for the coalition has faded away," said the lobbyist. 

The changes to the rule took away some of the fervor by the member companies for lobbying.

“In the final analysis, there didn't seem to be much reason for the coalition anymore because the rule did get watered down significantly. That's the irony of the business. You go do the job, the job gets done and you part ways,” the lobbyist said. 

“These things ebb and flow. When you are in the heat of the battle, you put all resources, all hands on deck when legislation and regulation threaten the very existence of the sector,” Lee said. “When that process is over, there's just a natural lessening of that kind of activity.”

Lee said the coalition could return to lobbying if the industry comes under heavy fire again.

“We still monitor what's going on out there. … We still keep the option to engage,” Lee said. “We just had a shift of focus.” 

Nassiran said the coalition could come back at any point.

“If there was a credible threat to the industry tomorrow, they would come back with twice as many lobbyists as before,” Nassiran said. “When you take the heat away, they tend to stand down a bit.”