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Posts Tagged ‘For Profit Colleges’
June 9th, 2011 at 8:23 am
Sen. Jim DeMint (R-SC) Offers Amendment to Block DOE Gainful Employment Rule
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Yesterday, Senator Jim DeMint of South Carolina introduced an amendment to block enforcement of the Department of Education’s recently released Gainful Employment rule. CFIF is pleased to see Senator DeMint take action against the rule, which goes too far in regulating private entities, and threatens to eliminate competition in higher education. Members of Congress on both sides of the aisle have made it clear that they oppose this rule, yet Senator Tom Harkin (D-IA) continues to lead a crusade against for-profit institutions. Moreover, Senate Majority Leader Harry Reid (D-NV) and Senator Dick Durbin (D-IL) have threatened to stop DeMint’s amendment in its tracks.

 As an organization that works to preserve free market principles against federal government assault, CFIF applauds Sen. DeMint for speaking out against the overbroad regulations that unfairly target career colleges. We call on all Members of Congress to continue to speak out and join Senator DeMint to prevent the enforcement of this unscrupulous rule.

May 5th, 2011 at 2:14 pm
“Gainful Employment” Means “Lossful Education”

Sorry to coin an awful word such as “lossful,” but in this case it fits. I wish to associate myself with Tim’s excellent post below about the Obamites advancing what he calls a “toxic” rule to undermine private, usually for-profit colleges. In addition to Tim’s history of excellent reports on this subject (and Renee’s), Mark Hyman has done several on-target pieces on the same subject. It’s also worth noting that this is not a typical, right-vs-left battle. As The Washington Times noted in an editorial, Marc Morial of The Urban League has joined a number of other left-leaning outlets in denouncing the administration’s outrageous policies. Mr. Morial told me the rule “would have disastrous consequences for those who are at greatest risk of a life in poverty if they don’t obtain a college education.”

As Linda Chavez wrote, “Shouldn’t the Education Department devote its resources to expanding opportunities for Americans to receive schooling, not restricting them?”

May 4th, 2011 at 5:48 pm
Obama Dept. of Education Advances Its Toxic “Gainful Employment Rule”
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There’s new political malfeasance from the Obama Administration.  Its Department of Education has sent the destructive so-called “Gainful Employment Rule,” which unfairly persecutes and effectively eliminates private college competition in higher education, over to the Office of Management and Budget for final review.

In addition to its harmful effects, the Rule is also riddled with corruption, from allegations of insider trading to defective Government Accountability Office reports.  The Education Department’s handling of this issue has been simply appalling.  Even more outrageous is the fact that the Department has not made the most recent version of the Rule – the one that was just sent to OMB for final review – available to the public.

In February, we applauded the House of Representatives when it passed a bipartisan amendment to H.R. 1 that stated that “no funds may be used to ‘implement, administer or enforce’ the U.S. Department of Education’s proposed Gainful Employment rule, nor may the Department ‘promulgate or enforce any new regulation or rule’ that would have the same effect as the Gainful Employment rule.  Unfortunately, however, that amendment was not included in the final budget.  But the battle to preserve student choice and market freedom in higher education is far from over.

At a time when our country has fallen behind in the rate of college graduates, we need competition in higher education now more than ever if we want to survive in an increasingly competitive world economy.  The Rule is clearly not close to being ready for final review, and the Department of Education must  reconsider its implications.  Most particularly, its harmful impact on less wealthy and working students who rely on career colleges and ultimately on our economy.

March 10th, 2011 at 5:43 pm
“Collegegate”: Obama Education Department to Track Private, Individualilzed IRS Records?
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Remember when the Obama Administration proposed thousands of new Internal Revenue Service (IRS) agents to enforce ObamaCare’s mandate that American businesses file 1099 tax forms every single time they spent over $600 with any supplier?  The resulting uproar was loud and justified.

Unfortunately, reports suggest that Obama’s Department of Education (DOE) similarly seeks to snoop through private IRS records to enforce its destructive “Gainful Employment Rule” against for-profit career colleges.

We at CFIF have chronicled the Obama Administration’s ongoing effort to cripple for-profit colleges via that rule, which would limit financial aid to students attending career colleges based upon arbitrary income data.  Along the way, we reported allegations of collusion between DOE personnel and short-sellers who had wagered that for-profit college stocks would decline.  Those allegations were sufficiently grave to trigger investigation by Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina).  Then, the GovernmentAccountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer involving undercover “students” sent to capture information on for-profit colleges.  The GAO’s revisions all slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  According to the GAO’s own estimate, only 1 percent of reports require correction, and the statistical likelihood that all of its flaws skewed in the same direction (unfavorably toward for-profit colleges) was 1 in 65,536.  Tellingly, the stock value of for-profit colleges reportedly fell 14%, or $4.2 billion, following the GAO report.

Now, instead of simply using aggregated, readily-available Bureau of Labor Statistics (BLS) data to enforce their Gainful Employment Rule, the DOE seeks to access private, individualized IRS records.  Not only does this intrude upon individual citizens’ private information, it serves to deter Americans from exercising free will in choosing the colleges that best fits their needs.  Additionally, as noted by Cesar Conda in The Washington Times, the Obama DOE’s effort constitutes a new get-rich scheme for the trial lawyer lobby:

The Department of Education should admit that it is using the Internal Revenue Service to send a not-too-subtle message to prospective students:  Attend a for-profit college, and risk that your private financial data may be analyzed to ensure that all your financial transactions are accounted for and allowed.  Thus, the Department of Education, rather than putting the interest of students first, is forcing hardworking adults to go through yet another hurdle to pursue upward mobility.  In their war against individual freedom and personal choice, the nanny bureaucrats never rest; they also roll out the red carpet for the trial lawyers. Clearly, the actual impact of such tracking of student incomes by the IRS will create a new business opportunity for class-action law firms, which will use these new student financial statistics, assembled and provided the Department of Education, to justify billion-dollar litigation.”

So in addition to crippling private career colleges that it considers politically unfavorable, the Obama Administration apparently wants to pore through students’ confidential IRS individual data.  Congress must maintain its current effort to defund this Obama Administration abuse, and Americans must support that effort and maintain its resolve.

February 14th, 2011 at 4:56 pm
Congress May Be Putting an End to “Collegegate”
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Finally, some good news to report on the Collegegate front.

A bipartisan group of Congressional Republicans and Democrats is preparing to take action that would interrupt the Obama Department of Education’s plans to unfairly cripple career colleges.  Chairman John Kline (R-MN) of the House Education and Workforce Committee, Chairwoman Virginia Foxx (R-NC) of the Subcommittee on Higher Education, and Representatives Alcee Hastings (D-FL) and Carolyn McCarthy (D-NY) are expected to offer an amendment later this week blocking Education Department funding for implementation of the abusive so-called “Gainful Employment Rule.”  In order to put an end to this overly burdensome regulation, we must show our support for providing education opportunities for students who attend career colleges, and urge Congress to support defunding the Gainful Employment Rule.  Please use CFIF’s directory to call your Member of Congress now, and tell them to support the Kline/Foxx/Hastings/McCarthy Amendment to the Fiscal Year 2011 Continuing Resolution on Gainful Employment.

January 25th, 2011 at 11:41 am
“Collegegate” – Wall Street Journal Details Short Sellers’ Meetings with Education Department Officials
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The festering “Collegegate” saga that CFIF has been following for weeks today reached front-page status in The Wall Street Journal.

We’ve detailed the allegations of insider trading against career colleges, which prompted Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) to ask whether officials within Obama’s Department of Education, “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”  We also detailed how the Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer involving undercover “students” sent to capture information on for-profit colleges.  The GAO’s revisions all slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  According to the GAO’s own estimate, only 1 percent of reports require correction, and the statistical likelihood that all of its flaws skewed in the same direction (unfavorably toward for-profit colleges) was 1 in 65,536.  Tellingly, the stock value of for-profit colleges reportedly fell 14%, or $4.2 billion, following the GAO report.

Now, under the headline “A ‘Short’ Plays Washington,” the Journal exposes how hedge fund operators sold short their stocks in for-profit career colleges, and sought meetings with federal officials at the Department of Education:

‘Hello, my name is Steven Eisman,’ began an email to an Education Department official in May.  ‘I wanted to bring to your attention many of the unsaid or unknown aspects of this industry.’  Mr. Eisman runs a hedge fund called FrontPoint Financial Services, whose hugely profitable 2007 bet that housing would collapse was chronicled in the book ‘The Big Short.’  In the past year, Mr. Eisman has sold short the stocks of for-profit education companies.  He and some other investors betting on these stocks to fall have sought meetings with Education Department officials, and in some cases gotten a hearing.  In emails and presentations, the investors have painted the for-profit industry in a highly critical light.”

The Journal also quotes Citizens for Responsibility and Ethics in Washington (CREW), which wrote Obama’s Education Secretary Arne Duncan that hedge fund managers were able to secure “direct and sustained input into the regulatory process.”  “In what the group called ‘more troubling,'” the article states, “it said Education Department officials sought and received investors’ input despite knowing their financial motives.”

Career colleges have flourished for good reason.  They offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  Unfortunately, the Obama Education Department seeks to cripple them by declaring them ineligible for federal aid.  CFIF has formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges, and that investigation is underway.

We at CFIF do not begrudge any citizen’s First Amendment right to petition the federal government for redress of grievances.  It is important, however, that the new 112th Congress ensure that these troubling allegations don’t reveal impropriety within the government itself.

January 3rd, 2011 at 5:22 pm
“Collegegate” Update: Incoming Congress Demanding Answers in Letter to GAO
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CFIF has been monitoring the developing scandal surrounding the Obama Administration’s assault against for-profit colleges, and we’re pleased to report the new Congress is already taking action to get to the bottom of it.

First came allegations of insider trading within Obama’s Department of Education.  As detailed in a letter by Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina), Education Department officials “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”  Then, the Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer involving undercover “students” sent to capture information on for-profit colleges.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, and the statistical likelihood that all of its flaws skewed in the same direction (against for-profit colleges) was 1 in 65,536.  Tellingly, the stock value of for-profit colleges reportedly fell 14%, or $4.2 billion, following the GAO report.

Now, incoming Oversight and Government Reform Committee Chairman Darrell Issa (R – California) along with Democrats Alcee Hastings (D – Florida) and Carolyn McCarthy (D – New York) and fellow Republicans John Kline (R – Minnesota), Brett Guthrie (R – Kentucky) and Glenn Thompson (R – Pennsylvania) have written the GAO demanding answers to the following “number of troubling questions” by today’s date:

1.  Has GAO’s Office of the General Counsel (‘OGC’) examined or investigated the facts surrounding the need to revise the August 4, 2010 report?  Please explain.

2.  Has OGC reexamined the report’s conclusions to ensure that they accurately reflect the analysis contained in the report?

3.  Has OGC verified the allegations that the methodology GAO used in the report is flawed and biased?  Please explain what was found.

4.  What are GAO’s procedures for revising a previously issued report?  Please provide specific steps.  Were these procedures followed in this instance?

5.  Why is there no announcement from the release of the modified report on GAO’s web site?”

This constitutes a promising start by the new Congress, including its suggestion of possible disciplinary action.  Stay tuned…

December 17th, 2010 at 2:45 pm
1 in 65,536: Likelihood that Defective GAO Report Attacking For-Profit Career Colleges Occurred Unintentionally
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It was embarrassing enough when the Government Accountability Office (GAO)  recently withdrew its defective “undercover study” issued last summer as part of the Obama Education Department’s campaign against for-profit colleges.  Readers will recall how the GAO sent undercover “students” to several schools to capture information as evidence for the Education Department and a Senate committee.  This was all part of their larger effort to justify the proposed “Gainful Employment” rule targeting for-profit career colleges that provide critical training and education to struggling Americans.  Worse, this came on the heels of a letter from Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) seeking investigation into allegations of insider trading within the Education Department relating to its campaign to cripple career colleges.

Now comes a report providing greater detail on just how malignant that the defective GAO “undercover” report was.  According to Frederick Hess and Andrew Kelly, fully 16 of the report’s 28 findings required revision.  Tellingly, every single one of those “findings” skewed the same direction – casting for-profit career colleges negatively.  The statistical likelihood of all 16 randomly tilting the same way, according to Mr. Hess and Mr. Kelly, is 1 in 65,536.

That doesn’t suggest extreme coincidence.  It suggests intentional malfeasance.

Amid persistent unemployment and intense global competition, for-profit colleges provide important alternatives for education and job skills.  That is why CFIF has formally petitioned Chairman-Elect Darrell Issa (R – California) of the House Committee on Oversight and Government Reform  to investigate this matter.  It is also important that supporters and activists across the nation contact their Senators and Representatives to help stop the Obama Administration’s unjustifiable scheme.

December 17th, 2010 at 9:07 am
Video: Obama’s Plan to Make College More Expensive
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In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the Department of Education’s war on for-profit colleges and universities, and the negative impacts of its proposed “gainful employment” regulations.

 

December 11th, 2010 at 11:33 am
CFIF Asks Rep. Issa to Investigate Obama Administration Campaign Against For-Profit Colleges
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This week, CFIF formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges.

Career colleges have flourished because of their ability to nimbly respond to our evolving economy, offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  The Obama Education Department, however, seeks to foist a proposed “Gainful Employment” rule that would declare academic programs ineligible for federal aid if some specified proportion of their graduates failed to meet an arbitrary income-to-loan payment ratio.

The natural consequence of such a rule:  vital for-profit career colleges would be eliminated.

The need for Congressional investigation became even more obvious this week.  The Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer in which it sent undercover “students” to several schools to capture information on recruiting policies, promises of post-graduation pay, federal and other funds for tuition and expenses, and more.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, so an inquiry into the reasons behind this particular revision – with its original report clearly biased – is justified.

That news comes on the heels of allegations that Education Department officials communicated with short-sellers to inform them of their intentions, providing certain traders with inside information potentially allowing for illegal financial advantage.  The cooperation, however, was allegedly a two-way street.  According to media accounts, these same short-sellers may have concocted elaborate schemes to cast a negative light on career colleges, helping them rationalize the proposed rule.   These allegations are sufficiently serious that Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have formally sought an investigation.

At a minimum, an alarming pattern has emerged that points to the Department of Education specifically working to inflict economic harm upon career colleges, while possibly collaborating in the shadows with the very short-sellers on Wall Street who would most likely benefit from such activity.

December 8th, 2010 at 4:56 pm
“Climategate” Part II? Obama’s GAO Admits Error in Targeting For-Profit Colleges
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Remember “Climategate,” which exposed the flawed and doctored data behind global warming alarmists’ partisan agenda?

We may have a new equivalent with the Obama Administration’s persecution of for-profit colleges.  A “Collegegate,” if you will.

CFIF has detailed the Education Department’s unjustified demonization of for-profit colleges, which provide working Americans the opportunity to improve their educations, obtain critical job skills and make themselves more marketable amid a tight employment market.  We also detailed how Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have inquired into allegations that the Education Department “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”

Now, compounding the shamefulness of this federal persecution, the Government Accountability Office (GAO) has just admitted that its August 4, 2010 report alleging undercover recruiting violations was defective.  This is significant, because only 1% of GAO reports receive revisions, suggesting substantial error in this particular instance.  Predictably, the GAO says that it stands by it’s “central finding,” but so did the United Nations and other global warming activists following the Climategate disclosures.  The implications are serious enough that Senator Mike Enzi (R – Wyoming) has written GAO chief Gene Dodaro regarding “a number of troubling questions” that “undermine many of the allegations” that the GAO has leveled in its campaign against for-profit colleges.

So on top of a transparently partisan Obama Administration attack against career colleges and allegations of insider trading, we now have the federal government admitting that its supposed “sting” report was defective.  It’s time to get to the bottom of this debacle, which is already humiliating for the Obama Administration.  It appears as though it’s only about to get worse…

November 22nd, 2010 at 2:51 pm
Senators Coburn, Burr Demand Investigation Into Obama Education Department Attack on For-Profit Colleges
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For-profit colleges provide an invaluable tool for everyday Americans to climb the ladder and improve their skills, particularly during a period of high unemployment when every little advantage matters.  That’s one reason why, according to estimates, enrollment at for-profit colleges has increased over 20% even since the recession began.  Despite this, such colleges find themselves in the crosshairs of the Obama Administration, whose Education Department seeks to impose suffocating restrictions on loans to students who wish to attend them.

Stop for a moment and imagine the outcry if the Bush Administration had pursued such targeted restrictions, which hit poorer and minority enrollees disproportionately hard.

Now, however, there’s even more disturbing news.  Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) sent a letter to the Education Department last week citing public documents indicating that it “may have leaked the proposed regulations to parties supporting the Administration’s position and investors who stand to benefit from the failure of the proprietary school sector.”  The Senators’ letter comes on the heels of a lawsuit whose evidence includes emails between Education Department advisers and short-sellers.

The Obama Administration’s mindless attack against these important colleges for working Americans is bad enough, but allegations of corruption and insider trading obviously exacerbate that looming disaster.  We’ll be following these alarming developments in coming days, as should anyone who cares about the American workforce maintaining its edge amid fierce global competition.