For-profit colleges fight effort to ban state aid to students

Barber shop
A barber shop at the Minnesota School of Barbering in Minneapolis.
MPR Photo/Tim Post

On most days the Minnesota School of Barbering on Lake Street in Minneapolis opens its doors to the public.

"Leave the sideburns where they're at and trim all the way around," said Gery Schadler of Minneapolis as he settled into a barber chair. For regular customers like him, the haircuts are a bargain at $7.

For student Greg Epps it's a chance to practice the craft of barbering and the art of barber chit-chat.

Barbering student with a customer
Barbering student Mike Johnson cuts the hair of customer L.Toebe of Minneapolis.
MPR Photo/Tim Post

"So what you got going on for today?" Epps asked as he began to trim Schadler's hair.

Students at the Minnesota School of Barbering spend just shy of $10,000 to attend the nine month program.

By comparison, that's about the same as one year of tuition at the University of Minnesota, and more expensive than a year at one of Minnesota's state colleges like St. Cloud State University.

Student Jacob Deisch, who stood nearby waiting for a customer, paid his tuition mostly through private loans. But he also received money for tuition from Minnesota's State Grant program.

"It helps a lot ... to get through school," Deisch said.

Peggy Schmidt
Peggy Schmidt runs the Minnesota School of Barbering.
MPR Photo/Tim Post

Peggy Schmidt, who runs the Minnesota School of Barbering, said many of her students qualify for tuition aid from the state.

They get "between $2,000 and $3,000 per student." she said.

But some Minnesota lawmakers feel that amounts to the state subsidizing a private business.

State aid should only go to students attending state universities or private colleges that aren't out to make a profit according Rep. Karla Bigham, DFL-Cottage Grove.

"I feel that we spend a lot of money on our higher education institutions and students. We ought to be putting the state grant money into them. We should be investing in them and not subsidizing the for-profit universities."

Bigham proposed a bill this session that would stop students at private for-profit universities from getting any state grant money. The bill recently died in a House committee. But Bigham hopes a companion bill in the Senate fares better, or that the issue makes its way into another bill this session.

All work done by students
A sign at the Minnesota School of Barbering makes sure customers know who does the work.
MPR Photo/Tim Post

According to the Minnesota Office of Higher Education, a little more than $20 million in state aid goes to 14,000 students who attend Minnesota's private for-profit schools each year.

The state's for-profit universities contend not allowing their students that money goes against the spirit of the state grant program.

Tom Kosel is with Globe University Minnesota School of Business.

"They always say that they are guided by helping provide financial access to post-secondary education and secondary educational institutions," Kosel said, speaking of the State Grant program. "At a time when students really need training this would limit some of their choices."

Banning state aid for students at private for-profit schools isn't likely to hurt Globe University, according to Kosel.

Minnesota School of Barbering
The Minnesota School of Barbering in Minneapolis, Minn.
MPR Photo/Tim Post

That's the case for most private for-profit schools, according to John Slama, who chairs the Minnesota Career College Association. It's only fair that students at for-profit schools get the same help as other students, Slama said.

"I don't believe in the long run that it would be a serious detriment to us. I think it would be a far more serious detriment to our students." Slama said.

Rep. Tom Rukavina, DFL-Virginia, chairs a House higher education committee where the issue has been discussed this session. Rukavina doesn't think lawmakers are picking on private for-profit schools. Cutting out, or at least reducing the grant, is an issue of fairness as the Legislature deals with the state's budget problems.

"I don't think that there's any appetite to completely cut the private career schools out of the picture. But if students are going to take a hit, they're all going to take a hit together." Rukavina said.

Even if the move doesn't make it through the Legislature this year, another problem looms for some of the state's private for-profit colleges.

In 2011, students attending a Minnesota college that's not regionally or federally accredited won't be eligible for state grant funds. That's likely to affect students at Minnesota smallest private for-profit schools, like the Minnesota School of Barbering in Minneapolis.