June 13, 2016

For-Profit College Lobbyist Gives the Game Away


It is absolutely stunning that the for-profit colleges’ chief lobbyist, Steve Gunderson, told a reporter today that a new Obama Administration proposed rule — a rule that would finally give students and taxpayers some leverage to recover payments for abuses by predatory schools — “will crush career education.”

What does that say about the performance and intentions of the schools he represents? It says, I believe, that many of these schools have made a lot of their money, in reality, by deceiving, over-charging, and abusing students, and if they can no longer do that with impunity, it’s game over.

And that is indeed the point of the rule: Debt forgiveness for students who were deceived by colleges; requirements that troubled colleges put up cash to repay victims and taxpayers in the event of their demise; and a ban on colleges using fine-print clauses to deny injured students the right to seek damages in court (clauses that only for-profit colleges have been using).

Once these rules are in place, the Department of Education will at last have real motivation to stop referring students and sending taxpayer dollars to predatory schools.  If that happens, federal aid will be focused on those institutions that are actually helping enough of their students to train for careers. That will increase opportunity for veterans, single parents, immigrants and others struggling to build better lives, grow our economy, and end decades of waste, fraud, abuse, and extraordinary corruption.

The new rule should be strengthened to provide full, automatic debt relief to all students who want relief where there is evidence of school misconduct; and to bar forced arbitration of any student claim against a school. Our coalition and leaders in Congress will press for those changes. But the Department of Education, under the leadership of Secretary John King and Under Secretary Ted Mitchell, has addressed a complex set of issues and produced a strong solution.

This article also appears on Huffington Post.