Former Florida Governor Jeb Bush (R) last week denounced President Obama's proposed "gainful employment" rule, which is aimed at holding accountable those career education programs that take taxpayer dollars but consistently leave their students with overwhelming debt. According to a post on Twitter by the trade association of for-profit colleges, APSCU, Bush on Wednesday told that organization's annual convention in Las Vegas, "The new [gainful employment] regs are a sledgehammer to the entire field of higher education."
Bush, a potential 2016 presidential candidate, has styled himself a champion of K-12 education policy reforms, and just two days earlier, Bush, addressing K-12 issues, had tweeted that "Strong accountability policies yield rising student achievement." But in the context of higher education, Bush seems less interested in holding poorly-performing schools accountable. While APSCU's name -- which stands for Association of Private Sector Colleges and Universities -- stresses the free market image it wants to project, the biggest for-profit colleges receive about 86 percent of their revenue from taxpayer dollars.
Given their strong dependence on federal dollars, it's not surprising that for-profit colleges are large donors to candidates for federal office, and the industry made a major investment in the 2012 campaign of Mitt Romney, who strongly endorsed for-profit higher education on the campaign trail. Any potential 2016 presidential candidate might be attracted to the financial largesse of APSCU's members.
Although some reputable, responsible colleges are members of APSCU, the organization is dominated by large publicly-traded and private equity-backed companies, many of which -- Corinthian, ITT, Education Management Corp., Kaplan, Career Education Corp. -- are now under investigation by federal law enforcement agencies, state attorneys general, or both. Pending lawsuits brought by government authorities charge that big for-profit colleges have engaged in deceptive advertising; coercive boiler room recruiting targeted at veterans, single mothers, and others; misrepresentations about programs costs and job placement; student loan fraud; and other misconduct.
President Obama has said that some for-profit colleges are "trying to swindle and hoodwink" students, because they only "care about the cash." Their students, the president has said, "can't find a job. They default.... Their credit is ruined, and the for-profit institution is making out like a bandit." Acting to protect the bad behavior of such companies, APSCU has led the charge to block the gainful employment rule, which would cut off federal aid to career college programs that, because of a toxic combination of high prices and low quality, leave graduates and dropouts alike with student loan debt they cannot repay.
This article also appears on Republic Report.