Sen. Tom Harkin (D-IA) has chaired a series of hearings by the Senate Health, Education, Labor, and Pensions Committee to pummel for-profit, private colleges as exploiters of students and the working class. The hearings reinforce the Obama Administration’s regulatory “crack down” on the institutions, which attempts to deny their students access to federal financial aid.
One of the primary documents used to justify these attacks was a report delivered last August to the Senate HELP Committee from the Government Accounting Agency. As Mark Hyman chronicles at The Washington Examiner, the report, which lambasted the colleges’ financial aid practices, proved to so flawed — a “fraud” — that the GAO withdrew it and quietly reissued a new report. Still, the continuing attacks and Obama Administration’s regulations caused the educational companies’ stocks to drop. And now we learn of serious allegations of insider trading at the Department of Education.
As Hyman calls it, it’s “the biggest GAO scandal you never heard about.” (See also Heritage’s Tina Korbe, “Government made major revisions to for-profit colleges report, didn’t tell public.”)
Alarms have been raised about recruiters making misleading pitches and students surprised by the debt they assumed. OK, let’s apply regulation, oversight, enforcement and a renewed sense of caveat emptor to put a stop to the practices.
But we also know that for-profit colleges provide a valuable educational resource for many students, especially adults looking for new career paths or training not immediately available elsewhere. These schools adapt to the needs of the students. Yet these businesses offering a service to willing buyers are being demonized in the political sphere. (continue reading…)