As the 2012 GOP nomination contest neared the critical Iowa caucuses, Mitt Romney was asked by the Ames Tribune's editorial board what he planned to do about higher education. Romney's response was crystal-clear: He liked for-profit colleges, especially a Florida school called Full Sail University. It turned out that Full Sail's owners were among Romney's top donors.
And that, it seemed, was the point: Although other GOP candidates that year, including Newt Gingrich, had personal and financial ties to the wealthy for-profit college industry, Romney, who denounced Obama administration efforts to curb industry abuses, won that year's for-profit college cash primary en route to the overall financial competition and, eventually, the nomination prize. Then the industry heavily funded Romney's general election campaign against President Obama.
The lesson has not been lost on the 2016 GOP candidates. For-profit colleges, which have been taking $30 billion or more a year in taxpayer money, not only have cash but a huge stake in federal policy. Many get 85 percent of more of their revenue from the federal government, and the industry is determined to halt new regulations and enforcement efforts pursued under the Obama administration to try to channel federal money away from poorly performing, predatory schools that leave many students much worse off than when they started. With Hillary Clinton now attacking such predatory colleges on the campaign trail, industry executives have big incentive to again provide big campaign dollars in hopes of having a friend in the White House come 2017 so that they can go back to their old ways: deceiving and abusing students, and cashing their federal financial aid checks.
So even though the for-profit college industry is now publicly discredited and on the ropes, facing collapsing enrollments, plummeting share prices, and growing federal and state law enforcement investigations, some GOP White House candidates are now brazenly competing for cash in the 2016 for-profit college primary:
- Money and poll frontrunner Jeb Bush has long made "education reform" his top issue, demanding that K-12 schools be held accountable for educating students. But when it comes to higher education, Bush has instead embraced the for-profit education industry's demand that it not be held accountable for student outcomes. At last year's meeting of APSCU, the trade association of for-profit colleges, Bush denounced President Obama's "gainful employment" rule, which is aimed at penalizing those career education programs that take taxpayer dollars but consistently leave their students with overwhelming debt. Bush told the group assembled in Las Vegas on June 18, 2014, that the new rules were "a sledgehammer to the entire field of higher education."
Bush's Floridian rival Marco Rubio has risen to the challenge. Two days after Bush's speech, Rubio wrote to the Department of Education on behalf of one of the worst for-profit colleges, Corinthian. In a letter to the Department's Deputy Secretary and Under Secretary, Rubio stated that the Department had "recently placed extreme financial constraints on Corinthian Colleges, Inc. by restricting the company's timely access to federal financial aid." He called on the Department to "demonstrate leniency" to Corinthian. Corinthian has since shut down, as its extensive frauds and abuses have been exposed. Corinthian is now under investigation or has been sued by at least 23 state attorneys general, as well as three federal law enforcement agencies, and many Corinthian students are demanding that their loans be cancelled. But Rubio appeared to see not a greedy company but a generous one; Corinthian Colleges gave $5,000 to Rubio's Reclaim America PAC during the 2014 cycle, and Corinthian's CEO was the chair of APSCU's political action committee. Now Corinthian is dead, but Rubio is undeterred: Tuesday, in a speech, he pledged to "bust" the higher education "cartel" -- "by establishing a new accreditation process that welcomes low-cost, innovative providers." Observers suggested, with good cause, that "low-cost, innovative providers" "could be a euphemism for for-profit colleges" -- the same colleges that gave Mitt Romney all that cash. Another contender, Scott Walker, as Wisconsin's governor, has frequently advanced the interests of special interest lobbyists in his state, often through cooperation with the notorious corporate advocacy group ALEC. Some of the biggest for-profit colleges have been ALEC members. In 2014, Walker publicly defended ITT Tech, a big for-profit college company whose abuses and perilous decline have now tracked Corinthian's; ITT is now under investigation by 19 states and is being sued by the SEC and CFPB. This year Walker tried to eliminate the tiny agency in his state that approves and oversees for-profit colleges; fortunately, the Wisconsin legislature blocked the move. Another hopeful in the for-profit college primary is Bobby Jindal, who wrote an op-ed in May 2014 attacking the new Obama gainful employment rule. Jindal repeated wholesale the argument of APSCU: that by shutting down some schools, the gainful employment rule would deny some low-income students access to education -- ignoring that there is a difference between depositing a student's tuition check and actually training a student for career. While Jindal may have been fishing for for-profit college cash, he omitted from his op-ed the fact that his brother had already been paid: Lawyer Nikesh Jindal represented APSCU in legal challenges to Obama regulations. But in the end, as usual, only one man in the GOP race is a real king. While the other candidates bow and scrape before the mighty-ish industry, Donald Trump already jumped into action and actually owns a for-profit college -- named Trump University, obviously. In 2013, New York's attorney general sued the unaccredited Trump school for "persistent fraudulent, illegal and deceptive conduct" after numerous students said they had been sold dreams and were left empty-handed. A New York judge ruled last fall that Trump is personally liable for operating the school without a license; the case is pending.
UPDATE 07-27-15: The newest entrant in the for-profit college primary is Carly Fiorina, who said, in an interview with Breitbart, "The Obama administration ... has been trying to drive for-profit universities out of business. Why? For-profit universities do a very good job of educating a lot of people at a lower cost." Pretty much exactly what Mitt Romney said four years ago.
This post also appears on Republic Report.
The Stakes Have Never Been Higher