As Republican presidential hopeful Rick Santorum steps up accusations that the Obama administration stymies business with unnecessary regulations, he has seized upon a new prop: the for-profit college industry.
"The president has had a war on private education," Santorum told a crowd at the Detroit Economic Club last week. "He believes that private sector schools are somehow evil and they're abusive, and his Education Department has done everything they could to make it harder for them to compete for loans and other things and to stay in business."
Santorum has effectively injected himself into a national debate over the legitimacy of the for-profit institutions, which derive as much as 90 percent of their revenues from federal student loans and Pell grants, but have left students shouldering huge debt burdens that have led to high rates of default.
The Obama administration has questioned the federal government's annual outlay of tens of billions to the for-profit college industry, introducing regulations last year meant to track whether for-profit schools deliver on promises of career training. Obama's new rules have set up a sharp partisan divide along the campaign trail, with Mitt Romney and now Santorum offering support for the industry in speeches and interviews.
Santorum also said in Detroit last week that, in comparison to Obama, he has a "very, very different attitude" toward for-profit colleges and would "make sure they are available and around and funded like any other school to be able to pick up and help the business community meet their training needs."
For his part, Mitt Romney, a former Massachusetts governor, told the Ames Tribune in Iowa in December that for-profit colleges could be a solution to addressing the rising cost of higher education. "Competition is a great source of invention and improvement, and I see the advent of for-profit institutions of higher learning, which I know the president and his supporters don't like," Romney said. "I actually like the idea of competition in higher education."
The two Republican candidates' statements are likely to pique the interest of for-profit college industry executives, who have historically pumped millions into congressional and presidential elections.
So far, Romney has far outpaced Santorum in campaign donations from for-profit colleges executives and political action committees. Romney has received more than $52,000 in contributions from the industry so far, including $11,000 from committees or executives of the Apollo Group, which owns the University of Phoenix, according to a Huffington Post analysis of campaign filings.
Santorum, a former U.S. senator from Pennsylvania, has received only $750 from executives tied to for-profit colleges, according to the latest filings.
Obama's campaign has received more than $6,000 from for-profit college executives and employees.
"Next year's elections could drastically change the political environment in Washington and around the country," the for-profit college trade group, the Association of Private Sector Colleges and Universities, declared in a recent presentation to executives. "It will be important for us to monitor the next two election cycles (2012 & 2014) to identify ways to insert our messaging and make a significant impact on targeted races."
Santorum has also criticized the public education system and prestigious universities such as Harvard -- institutions that he called "indoctrination centers for the left," according to David Halperin, a senior fellow at United Republic, a nonprofit group that aims to counter the influence of well-heeled special interest groups in politics. "Santorum has also taken the time to beat up on traditional colleges and universities," Halperin wrote in a blog post for United Republic, "a tack consistent with conservative talking points, but also presumably appealing to embattled for-profit college execs."
Recently for-profit colleges been heavily scrutinized by the federal government and state attorneys general for contributing to a disproportionate amount of federal student loan defaults: Fewer than 15 percent of college students attend for-profit institutions, but their students are responsible for nearly half of the defaults. One major chain of for-profit schools last year was caught lying to its accreditors about job placement rates.
Critics have charged that executives running the colleges' parent companies have thrived while students have fared poorly, dropping out in large numbers and defaulting on loans at more than twice the rate of their public university peers.
Because the for-profit college industry is so dependent on federal dollars, executives and lobbyists have become very attuned to regulatory developments in Washington. During the George W. Bush administration, the for-profit college industry successfully lobbied the Department of Education and a Republican-led Congress to relax regulations crafted in the early 1990s to root out abuses that led to massive default rates by students from these schools on government loans.
After the same problems began to resurface in recent years, the Obama administration proposed its stricter regulations. If too many students were unable to pay down loan balances, certain programs would be cut off from federal student aid.
Last year industry waged a multimillion dollar lobbying campaign against the rules, arguing in newspaper ads that regulation would prevent low-income students from receiving crucial career training.
Santorum argued along the same lines last week in favor of for-profit colleges. "They are going to be the principal tool, along with community colleges, to respond to this -- what I believe will be exploding demand for skilled and semi-skilled workers to do the jobs of the future," he said.
Community colleges across the country are being squeezed by state budget cuts, leading industry supporters to argue that for-profit schools are essential for educating students with nowhere else to turn.
"If we don't find a way for the for-profit sector to expand the size and delivery of post-secondary education in this country, we will not get it done," Steve Gunderson, chief executive of the Association of Private Sector Colleges and Universities, said in an interview last week. "With the federal and state budget cuts, there is simply no way."
Yet for-profit colleges on average end up charging students tuition that's nearly twice the amount at public four-year universities and nearly five times that of public community colleges, according to Department of Education data analyzed by the College Board. That leads many more students into debt at for-profit colleges: About 1 in 5 students at community colleges take out loans to pay for tuition, whereas 4 out of 5 students at for-profit two- and four-year schools must borrow to pay for education.
Plus, for-profit schools on average devote less than a third of the money that public universities do toward student instruction and less than a fifth of the amount spent by private non-profit institutions.
A spokeswoman for Romney, Andrea Saul, told HuffPost last month that Romney supports a "level playing field for different types of schools held accountable for their results," and that "to increase access and affordability, we must support the availability of a full portfolio of college options, public and private, traditional and on-line."
A spokesman for Santorum did not respond to requests for comment.