March 21, 2012

Sen. Rubio Supports Veterans Education Bill Despite For-Profit College Lobbyists “Hammering” His Office

Sen. Rubio Supports Veterans Education Bill Despite For-Profit College Lobbyists "Hammering" His Office

If he’s auditioning to be Mitt Romney’s running mate, then perhaps Senator Marco Rubio (R-FL) just swung at a pitch and missed. But if he meant to stand up for honest government and for America’s veterans, which apparently he did, then Rubio just hit a home run.

And, as a result, a high-priced team of Washington lobbyists suffered a setback.

Increasingly, responsible Senators realize we need common sense rules to ensure that federal aid to college students is spent wisely — so the money goes to programs that help students learn, earn valuable degrees, and get jobs, rather than programs that leave them with worthless credits and overwhelming debt. But the for-profit college industry, currently under investigation by a bipartisan group of 23 state attorneys general for fraudulent practices and shoddy programs, is accustomed to earning billions without any accountability.  So they fight every reform tooth and nail, and they often get their way, because they back up their expensive lobbyists with piles of campaign cash.

On the trail, both Romney and his chief rival Rick Santorum have pledged their allegiance to the for-profit colleges, and their opposition to President Obama’s efforts to hold these subprime schools accountable. Romney, who is tied to the industry through campaign donors and his own investments, seems ready to declare himself the For-Profit Education President.

Similarly, in the House of Representatives, the for-profits appear to have the loyalty of every single Republican.  The GOP is supposed to be about smaller government, fiscal responsibility, avoiding waste of taxpayer dollars. Many for-profit schools get 90 percent or more of their money from federal aid — this is a government program, not a pure free market venture — and the benefits ought to be provided honestly and in the interests of our citizens. But all such concerns have been swept aside by a GOP leadership that apparently sees for-profit college cash as a pillar of its empire.  A good number of House Democrats go along for the ride.

In the Senate, however, the tide may be turning. With strong leadership from Senators Tom Harkin (D-IA) and Dick Durbin (D-IL), more Democrats are standing up for students and taxpayers and standing against the arrogance and greed of the for-profit education industry. So Senators have been introducing a series of bills with tougher consumer protections, especially proposals to empower veterans and active duty military, who often have been the victims of deceptive recruiting by predatory schools.

Most recently, on Tuesday, Senator Frank Lautenberg (D-NJ) introduced a bill to provide every veteran who receives education aid from the Department of Veterans Affairs with counseling to help make the right choices. The bill also would set up a system to track veterans’ complaints of waste, fraud, and abuse by schools. It was endorsed right away by the Veterans of Foreign Wars, Iraq and Afghanistan Veterans of America, and Military Officers Association of America.

The bill seems pretty noncontroversial — who could object to our veterans getting the facts about their educational choices and speaking up to prevent waste?

And, indeed, the bill drew two Republican co-sponsors.  One was Senator Scott Brown (R-MA), logical because he’s in a tough race with consumer champion Elizabeth Warren. The other was Senator Rubio.

Maybe Rubio expected a smoother course. Some schools, including the biggest, University of Phoenix, decided not to oppose the bill. But then the second biggest, Education Management Corporation (EDMC), pushed back hard. EDMC, 40 percent owned by Goldman Sachs, runs The Art Institutes, Argosy University, Brown Mackie College, and South University. Its board chair  is John McKernan, husband of Senator Olympia Snowe (R-ME).

What was EDMC’s main objection? According to Hill sources, it was simply that Senator Harkin, their nemesis, was another co-sponsor. EDMC lobbyists applied heavy pressure to GOP offices, and, in particular, “hammered” Rubio’s office not to join forces with the villainous Harkin. The largest for-profit college trade group, APSCU, at first seemed disinclined to impede the bill, but with its member EDMC firmly opposed, APSCU now has told Senators it wants changes.

So why did Rubio hold firm against this pressure and join Democrats in sponsoring the legislation? A Hill source says it was … principle. As a conservative, he wanted to back a provision that guarded against waste of federal money. And he wanted to support our veterans. Principle! I hope more members of Congress — of all political stripes — follow Senator Rubio’s example.


EDMC released and sent to Republic Report a statement:


MEDIA CONTACT:Jacquelyn P. Muller 

EDMC Statement on Recent Allegations Made by David Halperin

 Education Management Corporation (EDMC) responded today to a blog written by David Halperin entitled “Sen. Rubio Supports Veterans Education Bill Despite For-Profit College Lobbyist “Hammering” His Office.” Anthony J. Guida Jr., EDMC’s Senior Vice President of External Affairs, released the following statement:

March 22, 2012 PITTSBURGH, PA – “The article incorrectly reports that EDMC has opposed a veteran’s education bill recently introduced by Senator Frank Lautenberg (D-NJ) (S. 2206 – GI Educational Freedom Act of 2012). EDMC’s view is that informed choice based on transparent disclosure of information, buttressed by existing laws that are enforced, strikes the correct balance between protecting veterans and their right to use their GI Benefits at the college of their choice.  Senator Lautenberg’s bill is a step in the right direction.  While we have met with several offices to discuss issues with the bill, we have not opposed it, as was reported by Halperin. Further, and contrary to the account, a request was made to meet with the office of Senator Marco Rubio (R-FL) to discuss the bill, yet no meeting or substantive discussions have occurred. Had EDMC been contacted about this story, we’d have been pleased to clarify our position.”

As soon as I saw this statement Thursday, I contacted Jacquelyn Muller of EDMC, requesting to speak with her and Anthony Guida and offering to correct any factual errors.  It’s been almost 24 hours, and they haven’t responded. My sources give a different account of events than EDMC does. I could at least have tried to sort out the conflicting accounts if EDMC had contacted me.

As to my not contacting EDMC before publishing, in my part-time role as a Republic Report blogger and in the past, I have generally contacted relevant parties for comment when I’ve published a piece that contains new assertions of fact, as this piece does. I have been for a couple of years a strong public critic of some for-profit education companies, and perhaps because of that they often don’t return my requests for comment. Last month, Kaplan CEO Andrew Rosen graciously spoke with me for 45 minutes for a piece.  But earlier this week I sought comment from APSCU for a post about an internal APSCU memo I received. APSCU returned the call, I sent them the memo, and told them my deadline; then I waited all day and never heard back. I think it’s likely that that post, which made public new information about APSCU’s strategy, was noticed at APSCU. EDMC is an APSCU member.  So I didn’t expect EDMC to return my message this week. And now, despite my offer to make corrections if warranted, they didn’t.

I will continue seeking comment from subjects of articles in appropriate circumstances.  If you are an official of an education company and would like to speak with me, or if you would like to inform me that you will comment for my articles if contacted, please write me: [email protected]

CORRECTION: In the update above, I had written that Avy Stein is the board chair of the Education Management Corporation (EDMC).  He isn’t.  (Stein is the chairman of the board of the Education Corporation of America, a different APSCU-member for-profit education company.)  I have deleted that sentence.  I regret the error and thank the person who pointed it out.