The rules took effect yesterday, so adjust tenses accordingly, but if all of this survives further court challenges that are surely to come it could change the higher education game for untold numbers of lower-income Americans — many of them combat veterans — fleeced and left jobless or underemployed by a financially rapacious industry more interested in Wall Street profits than in preparing students to compete in today’s job markets.
On Wednesday, the Obama administration will begin choking off the financial lifeline of for-profit colleges whose graduates can’t find well-paying jobs — and the move is likely to accelerate a wave of shutdowns for an industry taking assaults from all sides.
Reining in the multibillion-dollar industry has been the administration’s goal for most of President Barack Obama’s term in office, fueled by complaints that for-profit colleges lure students with misleading promises, then saddle them with debts they can’t pay back despite their newly granted degrees.
Its latest tool is the Education Department’s long-debated “gainful employment” rule, which requires colleges to track their graduates’ performance in the workforce and eventually will cut off funding for career training programs that fall short.
The rule — upheld by a court ruling last week and set to take effect Wednesday — will trigger the closure of 1,400 programs that together enroll 840,000 students, the department has estimated. Ninety-nine percent of those students attend for-profits.
The regulation is part of a broader series of crackdowns on the industry by agencies including the Consumer Financial Protection Bureau, the Federal Trade Commission and the Securities and Exchange Commission, along with investigations, lawsuits and fines from states and blistering criticism from Democrats like Sens. Elizabeth Warren and Dick Durbin. Some major college operators have begun closing or selling campuses under the onslaught.
I have a friend, a very savvy guy, who says that when some friends find out about his degree from the University of Phoenix, they ask snarkily, “What’s wrong? Couldn’t get into Devry?”
That is beyond cruel and focuses the blame on the scam victims: students promised better lives by these schools’ flashy marketing campaigns who instead got worthless degrees.
These schools have advertisements all over the country on TV, radio, the internet and public transportation, and they are slick offers of the kinds of fulfilled dreams and financial payoffs these degrees almost never provide. Chances are, if you were a dishwasher before your for-profit college degree, you will be one after you get it. The job placement offices of these schools, if they have one at all, are jokes.
This industry has had the support (and the campaign wallets) of a few unscrupulous Democrats, but mostly it has been Republicans on Capitol Hill who have blocked any legislative efforts to stop an industry that gives heavily to GOP candidates and essentially steals money from U.S. taxpayers (through defaulted student loans) just as it does from its hapless students .
Once again it has been the President, U.S. Sens. Elizabeth Warren (D-Mass.) and our own Dick Durbin (D-Ill.) leading the charge, along with Warren’s brainchild, the Consumer Financial Protection Bureau (CFPB), an agency that Republicans will gut if they ever again control both houses of Congress and/or the White House.
One suspects the for-profit education industry and its GOP supporters will now stage without a hint of shame a public relations effort focusing on the millions of “poor students” left adrift with only a partial education as these for-profit schools close. Don’t believe them. Those students are better off, and your tax dollars are better spent, on not-for-profit community colleges.
Vote accordingly in the next election.
(And, yes, the Politico reporter who wrote the referenced story has the entirely appropriate name of Allie Grasgreen.)
Source: Barack Obama pushes for-profit colleges to the brink – Allie Grasgreen – POLITICO