Former Rep. Kline Continues Shilling for For-Profit Education
Rep. John Kline (R-MN) defended and protected for-profit higher education businesses while chairing the House education committee, even after many companies in the industry were caught engaging in widespread predatory and deceptive practices. Now that he’s retired, Kline is cashing in, serving on the board of Education Corporation of America (ECA), which operates poorly-performing for-profit colleges, and, in a new op-ed in The Hill, arguing that the Consumer Financial Protection Bureau should drop a lawsuit charging giant student loan company Navient with deceiving and cheating borrowers across the country.
While in Congress, Kline took hundreds of thousands of dollars in campaign contributions from the for-profit college industry, as well as donations from employees of Navient and its predecessor, Sallie Mae, while working to block measures to hold for-profit education companies accountable for abuses.
Avy Stein, a Chicago private equity man who is the board chair of ECA, was a few years ago one of the most aggressive lobbyists against one such accountability measure, the Obama administration’s gainful employment rule, which was aimed at penalizing schools that repeatedly leave graduates with overwhelming debt. According to the New York Times, Stein, in a meeting, promised to “make life rough” for then-Senator Tom Harkin (D-IA) if he proceeded with oversight of for-profit colleges. (Stein denied saying that.)
Kline, meanwhile, pushed legislation in the House to block the gainful employment rule.
Now Stein and Kline serve together on the ECA board.
Meanwhile, Navient makes millions servicing student loans, and ECA schools depend on student loans to enroll moderate- and low-income students. ECA schools — Virginia College and Brightwood College (formerly Kaplan College; acquired in 2015 from Graham Holdings) — did particularly poorly on the first round of gainful employment measures, with many of the company’s programs flunking the test comparing graduates’ incomes with their debt burdens. If the rule were implemented, schools that flunked the test multiple years in a row would lose access to federal loans; but now the Trump-DeVos Department of Education is moving to gut the measure.
UPDATE 08-31-18: The accreditor ACCET today acted to deny accreditation to Virginia College based on the school’s failure to comply with nineteen accreditation standards. Virginia College remains accredited by the troubled ACICS, which the Department of Education dropped as a recognized accreditor in 2016 but which Trump education secretary Betsy DeVos is considering re-instating.
The CFPB’s lawsuit to which Kline now objects alleges that Navient created obstacles to students repaying their loans by providing bad information, processing payments incorrectly, and failing to act when borrowers complained. The CFPB complaint further alleges that Navient used deception to illegally cheat borrowers out of their rights to lower their payments.
Kline’s op-ed urges the CFPB to drop the case.
Trump OMB head Mick Mulvaney has been running and systematically weakening the CFPB, and he now proposes to hand the agency over to an OMB aide with little financial background. So Kline may get his wish.
John Kline’s career and latest intervention are a profound example of how money corrupts policy in Washington, DC. His campaigns were funded by for-profit education money, and from his perch as the chair of the House education committee, he largely did what the industry wanted. When he retired, he was rewarded with a lucrative seat on the board of a for-profit college company, and he continues to advocate for the industry.
The only silver lining is that The Hill, where many lobbyists have in the past posted their shill op-eds without disclosing who is paying them, has, in the wake of the Michael Flynn debacle, apparently cracked down and requires disclosure of, for example, the fact that Kline is now on the ECA board.