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| 9 Audra Turner, and I'm the Executive Director of the Paul
10 Mitchell Schools located in Ardmore, Oklahoma, 11 Arlington, Dallas, San Antonio, Texas, and Miami, 12 Florida. 13 I'm here to voice my support for the 14 Department's efforts to review the Borrower Defense 15 Repayment and Gainful Employment regulations. Like John 16 Turnage I, too, hope the Department will consider 17 representatives from our Paul Mitchell School network on 18 both Gainful Employment and Borrower Defense Repayment 19 committees. I've been working in the hair care industry 20 for 30 years as a stylist, a salon owner, and an 21 educator. That experience has helped shape the remarks 22 I'm sharing today. 23 As you can imagine, in our industry, it's 24 mostly women. The reality is 95 percent of people who 25 enter cosmetology schools are women. Many of them are 
1 single, and some of them are single mothers. Future 2 professionals who are single often enter training 3 thinking they will stay in the business for a few years 4 full-time and then transition to a part-time 5 supplemental income as they marry and have children. 6 Yet they know they have a school that they can employ 7 full-time that will take care of their families should 8 the need arise. 9 In contrast, single mothers often enter our 10 programs because the cosmetology training is quick. 11 It's about a year. When licensed, a career in 12 cosmetology offers a flexible work schedule to allow 13 part-time or full-time as your family needs dictate. 14 These realities are not reflected in the 15 one-size-fits-all approach under Gainful Employment 16 regulations which currently only consider full-time 17 employment to have sufficient value. The reality is the 18 schools are unable to dictate the degree of work a 19 graduate chooses. Again, our graduates are frequently 20 second-income earners and decide to work part-time or 21 not at all. We fully support these decisions but feel 22 it's inappropriate for the reduced or missing income 23 from these graduates to harm a school's GE ratios, 24 especially when their household income clearly shows 25 sufficient means to repay these loans.
1 I would also hope the committee will 2 examine the need for schools to provide greater direct 3 counseling for students taking out federal student 4 loans. Too often, we see students who come in and 5 borrow too much money or more than they need. Of 6 course, some of these students need additional income to 7 pay for rent and transportation. However, we know a few 8 instances where they take significantly more. For 9 example, one young woman told a school owner that the 10 extra money from her student loans would be used by her 11 mother to renovate the family kitchen. Unfortunately, 12 under Gainful Employment, the school that that young 13 lady attended is now being held accountable for the 14 unwise and excessive federal student loan. Currently, 15 there is nothing this school can do or say to prevent 16 it. That's just not appropriate. 17 Another concern that I have with Gainful 18 Employment is that our schools are to be held 19 accountable for what our graduates report. The reality 20 is that cosmetology is a cash- and tip-based industry. 21 People dealing in cash often underreport their income. 22 The IRS estimates a substantial chunk of our $458 23 billion tax gap likely comes from underreported 24 small-business income, and especially those dealing with 25 cash.
1 According to the Tax Policy Center, 2 individual taxpayers fail to report about 65 percent -- 3 or sorry -- 63 percent of income from sources from which 4 there is no information reporting, such as credit cards. 5 That is consistent with the recent results we received 6 when we did our appeals process with our Paul Mitchell 7 Schools. After interviewing our graduates, their income 8 underreported -- was underreported an average of 65.5 9 percent across our network. To conduct these earnings 10 appeals, we needed to call most of our graduates 11 multiple times and were required to impose upon them by 12 questioning their income, many of which had 13 underreported to the IRS. 14 Just finding our graduates is a major task. 15 As mentioned before, our graduates are women, and they 16 change their names upon being married. It's often 17 difficult for our schools in military bases, because 18 these now married women follow their spouses to move 19 multiple locations and sometimes abroad. These factors 20 add significant costs in our efforts to track down and 21 document how much money they really made. The Gainful 22 Employment regulation has been poorly planned in its 23 implementation but, especially, as it applies to 24 cosmetology. 25 Now, I would like to discuss the Borrower
1 Defense to Repayment regulations. I, again, express my 2 support for the Department's suggested review of the 3 rules and regulations and current implementation of that 4 effort. There is, certainly, a need for a fair process 5 for the students and the taxpayers. We need to be 6 protected from unscrupulous schools, but the Borrower 7 Defense to Repayment process as established under the 8 previous administration has added a negative effect on 9 cosmetology schools. Lenders and landlords are anxious 10 about the regulations that provide stackable penalties, 11 and the risk of those penalties can turn the owners to a 12 place where they're apprehensive about opening new 13 schools. 14 I would really like to ensure that we find 15 a solution so that we can continue to provide future 16 generations with the opportunities that I have enjoyed 17 in this industry. 18 Thank you for allowing me to speak on 19 behalf of cosmetologists. 20 MR. MANNING: Thank you very much. 21 MR. MARTIN: Sandy Sarge. 22 MS. SARGE: Good afternoon. My name is 23 Sandy Sarge, and I'm the president of Sarge Advisors, a Directory: policy -> highered -> reg -> hearulemaking policy -> American bar association adopted by the house of delegates policy -> The Threats of policy -> 2nd Quarter 2010 policy -> Nato unclassified north atlantic treaty organisation policy -> Department of the Navy Office of the Assistant Secretary (Research, Development and Acquisition) Washington, dc 20350-1000 navy marine corps acquisition regulation supplement policy -> Policy Manual June 2015 policy -> Executive summary Download 5.96 Mb. Share with your friends:
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