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One of the more bizarre initiatives to come out of the Obama Administration is the war against for-profit colleges.  The President is pushing a rule to “cut federal aid to programs where student debt levels are deemed to be too high and where students are struggling to repay their loans,” reports Jim Angle of Fox News.  It has the practical effect of driving for-profit colleges out of business, if their students borrow too much money for tuition.

This is supposed to “make sure poor students aren’t persuaded to borrow a lot of money, then get an education they can’t afford, and that doesn’t lead to a job,” as Representative Rob Andrews of New Jersey, a Democrat opponent of the plan, explains it. 

But that’s super keen when public schools do it, right?  One of the greatest educational crises we face is the ridiculous inflation of tuition through massive federal subsidies, which have turned universities into sponges designed to soak up all that crazy taxpayer money.  A rule specifically designed to strangle for-profit universities looks suspiciously like an effort to help the bloated public education bureaucracy by wiping out its competitors.  It’s crony capitalism without any capitalists.

The Obama plan has brought together a remarkable bipartisan coalition to protect the struggling for-profit universities.  Former Bill Clinton adviser and media fixture Lanny Davis asks, “Can you think of any other issue that former Speaker Nancy Pelosi and current Speaker John Boehner agree on?  The policy is so wrongheaded that it brings liberals and conservatives together.”

Among the many reasons to be highly suspicious of this special rule – which few public universities could pass – is that “for-profit colleges who educate a high number of African-American and Hispanic people” would be ruined, as a puzzled Harry Alford of the National Black Chamber of Commerce put it.  Are we supposed to believe the First Black President didn’t know that?  It’s much easier to believe he doesn’t care, because he has other interests to appease.

Of course, like virtually everything else Barack Obama does, this initiative will destroy jobs.  Bloomberg News reports that “education companies have been hurt as investors have waited for the Education Department to write its regulations.”  Over a billion dollars of value has been lost.  The largest private education company, Apollo, lost 32 percent of its value over the past year. 

According to Bloomberg, the Department of Education estimates that “if the rules were in effect today, programs enrolling about 8 percent of the students at for-profit colleges nationwide would lose eligibility.”  That’s about 150,000 students.  How many private-sector jobs would vanish with them?

Furthermore, many of these for-profit institutions are “vocational” schools, which focus on teaching practical job skills instead of academic subjects.  The market is hungry for people with such educational backgrounds.  Mike Rowe, the host of the Discovery Channel’s long-running Dirty Jobs program, recently testified before Congress on this point.

The value of education has been wildly distorted, and it is indeed important not to lure people into taking out loans they cannot repay, as the housing market collapse should have taught us.  The public education system is far more deserving of scrutiny than the private education market in this regard.  The amounts of money surging through that system, and disappearing without benefit to students, dwarfs for-profit college money by several orders of magnitude.  The biggest problem with educational funding is that there’s too much funding, and not enough education.

This President was so eager to pump billions into the education bureaucracy that he slipped debt forgiveness for the student loans of government employees into his health care bill.  Now he wants to make sure education money stays firmly in the grasp of the State, by hammering private colleges with a standard that would instantly annihilate the public university system.  Shall we propose applying these rules universally, and see what Obama says?

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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