October 14, 2015

Purveyors of Wisdom on Higher Ed Panel Have Advanced Harmful For-Profit College Agenda

Purveyors of Wisdom on Higher Ed Panel Have Advanced Harmful For-Profit College Agenda

Today, the day after the New York Times ran a blockbuster front-page lead story describing some of the worst ongoing abuses of big for-profit colleges, one of the nation’s leading higher education philanthropies kicked off a major conference in Washington with a panel giving its place of honor to the retired former chairman of the House of Representatives committee on education, Howard “Buck” McKeon (R-CA).

It can be said that in Congress, McKeon truly made his mark on higher education. Before his retirement earlier this year, McKeon worked to unshackle the for-profit college industry from sensible safeguards and then to block reforms aimed at holding the worst schools accountable, as he accepted campaign contributions from the industry and even owned shares in Corinthian Colleges, one of the most cynical and destructive actors in the sector.

At McKeon’s side for the the conference panel were two former education policy government officials, one a Democrat, the other a Republican. But both of them, in fact, are now lobbyists for big for-profit colleges.

The event sponsor, the Lumina Foundation, based in Indianapolis, was created when a major private student loan guarantee operation sold its assets to student loan giant Sallie Mae for $770 million. With that enormous endowment, Lumina has dedicated itself to promoting opportunity and innovation in higher education, to build a higher education system that is “accessible, responsive and accountable.” Fine people work at Lumina. In my previous job at the Center for American Progress, I participated in Lumina conferences, provided advice for some Lumina projects, and even once received a Lumina grant for my organization.

But sometimes Lumina’s effort to involve the widest range of voices on education helps reinforce the view that higher ed policy embodies the worst tendencies of Washington, where sincere reformers rub shoulders with people who stand for Washington’s corrupt revolving door culture. And everyone smiles, and shakes hands, and no one says anything about it.

Today’s Lumina conference was entitled “The Higher Education Act at 50: A Time for Reflection and Revitalization.” And it began with a session called “A Conversation with Congressman McKeon.” Jamie Merisotis, President and CEO of the Lumina Foundation, was the discussion moderator. His three “Special Guests” were listed as:

The Honorable Howard Philip “Buck” McKeon, Retired Chairman, Committee on Education and the Workforce, U.S. House of Representatives

Sally Stroup, Executive Vice President of Government Relations and General Counsel, Association of Private Sector Colleges and Universities

Alex Nock, Principal, Penn Hill Group

The panelists spoke about the need for Republicans and Democrats to work together and find common ground to improve the Higher Education Act. That’s great. But they didn’t talk about the work all three of them have done to hurt higher education by backing the agenda of predatory career colleges that have for decades fleeced taxpayers and left students — single parents, veterans, and others struggling to build a better future — out of work and buried in debt.

McKeon became the chair of the House education committee in 2006, succeeding Rep. John Boehner (R-OH). That year, lobbyists for the for-profits pushed Congress to enact an amendment deleting from the law a limit on the percentage of students that a college receiving federal student aid could enroll in purely online courses. This deregulation was a critical step in opening wider the spigot of federal aid to unscrupulous operators, leading to a decade of terrible waste, fraud, and abuse with taxpayer dollars.  

The college operators knew how to get the attention of powerful congressional leaders. As Chris Kirkham reported in the Huffington Post, for the three election cycles between 2002 and 2006, just three members of Congress received almost one-fifth of all the cash that the for-profit college industry donated to federal candidates and committees. They were Boehner, Senate education committee chairman Mike Enzi (R-WY), and Buck McKeon. 

Meanwhile, as he served as a senior House member, McKeon, as reported on his financial disclosure forms, owned between $1,000 and $15,000 in Corinthian Colleges stock in 2003, and sold it in 2004.  Corinthian ended up as one of the worst actors ever in the sector, deceiving and abusing students while taking in as much as $1.4 billion in taxpayer money annually before it shut down this year after plummeting enrollments and share prices, and in the face of numerous federal and state law enforcement investigations

Through his retirement from Congress in January amid a sea of ethics concerns, McKeon was a regular campaign cash recipient of for-profit colleges. Meanwhile, he repeatedly battled against reforms, including the Obama Administration’s gainful employment rule, aimed at cutting off federal aid to career education programs that consistently leave their students with debt they cannot afford to repay.

McKeon left office with $250,000 left in campaign funding, a sum Politico called “eye-popping.” The publication reported in May that McKeon has:

used the money to pay his wife about $20,000 since Election Day. Patricia McKeon worked for the congressman for years without pay, the ex-congressman said in an interview, and she’s now helping him close out his campaign operation. “If you average that all out over the 22 years, it’s a lot less than the indication,” the ex-congressman asserted. “People think we paid her that much forever,” he added, but the fact is “she worked for years for free.”

The work that McKeon and Boehner did during the previous decade to eliminate the online learning restriction on behalf of industry lobbyists was backed by the Bush Administration, including with reports endorsing online learning issued by President Bush’s assistant secretary for post-secondary education, Sally Stroup, who joined McKeon on the stage today.  Stroup was quite familiar with online education, as her previous job was lobbyist for the Apollo Group, operator of the biggest for-profit college, the University of Phoenix. Under Stroup, the Bush education department in 2002 also gutted the rules barring for-profit colleges from paying staff based on the number of students enrolled, a move that accelerated the industry’s pernicious boiler room recruiting culture. [UPDATE, 10-16-15: A former Department of Education official tells me that Stroup was recused from addressing the revision of this boiler room rule because of her former employment at Apollo, and that Stroup said on leaving the Department that she was in fact opposed to it.]

In 2012, Stroup became a lobbyist for the for-profit colleges’ shameless trade association, APSCU, as it has continued its expensive, heavy-handed effort to defeat the gainful employment rule and other Obama reforms. APSCU’s work, heavily coordinated with the House Republican leadership, has largely backfired, and many of its members have fled, forcing layoffs and salary cuts. Stroup’s last day at APSCU is apparently tomorrow.

Menawhile, Stroup’s old employer, the University of Phoenix, still has an army of well-connected lobbyists working on its behalf in Washington.  And that army includes the other panelist appearing with McKeon and Stroup at the Lumina event, Alex Nock, who worked for Rep. George Miller (D-CA), the lead Democrat on the House education committee, as deputy staff director from 2007-10, during the period when McKeon was the committee’s top Republican.  Now, working at the Penn Hill Group, Nock has been lobbying for Apollo/ University of Phoenix, which has been pushing to block accountability measures.

The company has its hands full right now, with the Defense Department last week taking the unprecedented step of suspending its tuition assistance money to service members newly enrolling at the University of Phoenix, while Pentagon investigators review evidence that the company’s recruiting has violated regulations aimed at protecting our troops from deception. The University of Phoenix is also under investigation by the attorneys general of Florida, Delaware, Massachusetts, and California, the Securities and Exchange Commission,  the Federal Trade Commission, and the Department of Education’s Inspector General.

The more than $30 billion a year that the for-profit college industry has been taking from taxpayers has allowed predatory schools to spend vast sums to influence policy in Washington and keep the money flowing, without limits or accountability. In addition to purchasing politicians like McKeon, and lobbyists like Stroup and Nock, the industry has spent heavily to buy support from cash-starved non-profit groups and media outlets.

But Lumina is rich. It doesn’t have a financial need to play along with the charade that the big for-profit colleges have been solid citizens, and that their defenders deserve to be seen as impartial experts on how to best educate our citizens for careers.

All of the participants in the Lumina discussion — McKeon, Stroup, Nock — may have come to Washington aiming to advance policies that would help our country, including our students. But all have taken in money from predatory for-profit colleges, and all have worked to propel the industry’s education agenda, which has harmed the interests of students and taxpayers.  That Lumina today put the trio front and center at a higher education conference illustrates the troubled nature of D.C. political culture — and the obstacles to advancing the public interest in our country.

This article also appears on Huffington Post