In June, the Department of Education released its new rules about for-profit colleges. The regulations are known as the “gainful employment” rules, because they seek to ensure that graduates are adequately prepared for the workforce (and prepared to pay off their student loans) once they leave school. The final rules were weaker than those originally proposed by the Department of Education, and now we know why–the for-profit industry lobbied heavily to dilute the rules, according to a new investigation in the New York Times.
Here’s the story in short: The Department of Education proposed tough new rules on for-profits. These rules could take away federal student loan eligibility for schools that aren’t adequately preparing their students for jobs. Since most for-profits get the vast majority of their funding from federal loans (up to 90% in some cases), this would be a serious challenge to the for-profit business model. So, rather than reform their practices to ensure higher quality of education, the for-profits amassed an army of advocates to lobby the Obama administration:
Officials at the White House and the Education Department described the industry’s aggressive efforts as unusual even by Washington standards. Mr. Sunstein, the White House official, characterized the intensity as “extreme.”
And it worked. The final rules were substantially weaker, and misbehaving schools won’t be punished until 2015 at the very earlier. This was the subject of my very first @forprofitwatch tweet.
Of course, many of us suspected as much at the time – what other explanation could there be for the sudden shift? Still, it’s interesting to see how the industry was fighting against the regulation–and how threatened they felt by the proposed rules. I only wish student advocates had the power and influence that the for-profits do.
If you are interested in exactly how the rules were watered down, Inside Higher Ed wrote a great summary at the time of the proposed rules compared to the final ones.
Follow me on twitter for more news from the for-profit college industry: @forprofitwatch