Wednesday, August 26, 2015

Hillary Picks Up Obama’s Attack on For-Profit Colleges

The Obama Administration’s attack on private, for-profit career colleges will get a new life under a Hillary Clinton Administration. Commenting favorably on Clinton’s recently announced government plan to bail college students out of their debt burdens, the New Jersey Star-Ledger editorialized about Clinton’s “piecemeal package”:

Its best component . . . is it continues the Obama administration's attack on exploitation, enforcing a gainful employment rule that judges ruthless for-profit schools on their students' debt and incomes after graduation.

Obama’s attack on for-profit colleges began in 2010 with the so-called “gainful employment” rules, which are supposed to see to it that the debt levels students graduate with are commensurate to the income they will receive from their chosen career path. These rules were subsequently shot down in the courts, but were reinstated in July of this year. (See Craig Biddle’s extensive article from the print edition of The Objective Standard, The Government’s Assault on Private-Sector Colleges and Universities, and my follow-up TOS blog post The Government’s Renewed Assault on Private-Sector Colleges.)

I left these comments on the Star-Ledger’s editorial:

The elephant in the room is the fact that the government college financing gravy train caused the runaway college costs that Clinton now wants to fix with still more taxpayer largess. It’s the same old scheme, repackaged: Wave the magic wand of more government subsidies, and the cost  problems Americans face with higher education will miraculously disappear. No concern for who will be forced to pick up the tab—American taxpayers themselves.

The worst of this editorial, and of Clinton's plan, is the vicious smear and attack on “ruthless for-profit schools.”

For-profit colleges, also called career colleges, cater mostly to mature working poor and middle class students who are trying to improve their skills through education while juggling jobs, families, and other adult responsibilities. These schools succeed despite unfair competition from public colleges, which have the benefit of taxpayer subsidies that enable them to keep tuitions artificially low.

The Obama Administration’s attack on for-profit schools is motivated by an ideological bias against profits, not any concern about “exploitation.” The gainful employment rules are rigged mainly to target the for-profit colleges. There is a double standard here. If the gainful employment debt-to-earnings guidelines were fairly enforced against all colleges, the public colleges and non-profit colleges would fare as bad or worse than the for-profits. The problem of the disconnect between the cost of higher education and the ability to repay the loans cuts across all of higher education, not just private for-profits. And it is mainly the government’s fault, [relating to the wide-open spigot of easy government-backed student loans]. Yet Obama gives all but the for-profits a pass.

Clinton’s plan continues that hateful attack. If successful, the discriminatory attack on for-profit colleges would cut off an important educational path for millions of students trying to improve their career prospects.

True, there are some unscrupulous private for-profit colleges. But the same goes many times over for public colleges, which have ridden the government’s student loan gravy train to tuition increases four times the rate of inflation over the last several decades. But the Obama Administration and the Left generally are allowing their hatred of profit-seeking to drive a scheme to target, crucify, and eventually eliminate the for-profits and gain increasing government control over higher education. Their use of government power to discriminatorily attack the for-profits would make any gangster drool with envy.


Students attending or considering for-profit colleges that don’t meet the gainful employment standards will lose access to federally-backed loans and grants. Given the dominance of the government in student financing, this will effectively put many of these schools out of business. And that, not any concern about “exploited students,” is the goal of Obama, Clinton, and their mouthpieces in the media like the New Jersey Star-Ledger.

But as I wrote for TOS,

The government should not be involved in lending money to students at all. But so long as it is, and so long as it regulates these loans, it is morally obligated—and should be legally obligated—to treat all students and all educational institutions equally under the law. Toward that end, Congress should amend the Higher Education Act to forbid the executive branch from acting prejudicially against private-sector, for-profit colleges and universities.

Related Reading:

NJ Assemblyman Joseph Cryan's Bill to Control College Costs is the Wrong Solution

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