You’ll remember that U.S. Secretary of Education Betsy DeVos, an educational libertarian, isn’t much of an advocate for government regulation. For example, DeVos has been hiring for-profit college lobbyists for key federal positions involved in the regulation of those same colleges, and she has been delaying or eliminating rules and guidance designed to regulate the for-profits.
In her 2014 book, Degrees of Inequality: How the Politics of Higher Education Sabotaged the American Dream, Cornell University professor Suzanne Mettler tells us why we should worry about DeVos’s relaxing regulation of the for-profit higher education sector: “Defenders of for-profit universities champion them as belonging to the private sector, but in recent years as in the past, they receive nearly all of their revenues from the U.S. federal government.” Examining large institutions like the Apollo Group, the now-defunct Corinthian Colleges, Kaplan, DeVry, the now-defunct ITT, Bridgepoint, Strayer, Capella and others, Mettler explains: “Notably, these institutions, with only one exception, earned between 60.8 and 85.9 percent of their total revenues in 2010 from Title IV of the Higher Education Act, meaning predominantly student loans and Pell grants. The Apollo Group, owner of the University of Phoenix, gained between 85 and 88 percent of income from these sources in each of the past three years. Most received an additional 2 to 5 percent from military educational programs, including the Post-9/11 GI Bill. The sum of these federal government funds added up, as a portion of all revenues collected, to a minimum of 65.8 percent for ITT and a maximum of 93.7 percent for Bridgepoint. In short, the for-profit schools are almost entirely subsidized by government.” (Degrees of Inequality, p. 168)
While Betsy DeVos and her spokesperson are quick to reassure us that all staff appointed to regulate for-profit higher education are complying with ethics rules, the Washington Post‘s higher education reporter, Danielle Douglas-Gabriel tells a very different story. This week there is controversy about DeVos’s recent appointment of Diane Auer Jones: “Ten Senate Democrats are questioning the role and potential conflict of interest of a recently hired official at the U.S. Department of Education who has ties to the for-profit college industry. Lawmakers sent Education Secretary Betsy DeVos a letter Thursday raising concerns about Diane Auer Jones. She is a former education official under George W. Bush and a former senior vice president at Career Education, a for-profit college operator. Jones, who was appointed senior policy adviser to the assistant secretary for postsecondary education in February, has also worked with for-profit colleges as a lobbyist and consultant. Senate Democrats say those relationships color Jones’s objectivity in advising on policy and regulatory matters that affect her former employers and the for-profit industry.”
Douglas-Gabriel explains that in their recent letter, Senate Democrats express particular concern that Diane Auer Jones will fully reinstate the Accrediting Council for Independent Colleges and Schools as an approved accreditor for for-profit colleges, universities and trade schools. Back in November of 2015, a year before the Education Department stripped the Accrediting Council’s right to serve as an accreditor on behalf of the federal government, the Obama Department of Education began investigating the Accrediting Council. At that time Douglas-Gabriel reported: “The government depends on private-sector accreditors to be the stewards of federal financial aid, the lifeblood of colleges and universities. Accreditors are supposed to conduct in-depth investigations of colleges’ facilities, retention rates and teaching quality to ensure taxpayer money is going to quality colleges. But there is no uniformity in the way they decide who enters and exits federal student aid programs, leading to a system that is at best subjective….” “The implosion of for-profit giant Corinthian Colleges exposed cracks in the accreditation system that have left the sector open to endless criticism. The company… retained its accreditation even as the government cut off its access to federal student loans and grants for falsifying job placement and graduation rates. Corinthian for years faced government lawsuits and investigations that accused it of lying to students and committing fraud, yet accreditors stood behind the school.”
The NY Times Erica Green provides some background about the Accrediting Council and how college accreditation works: “The Accrediting Council for Independent Colleges and Schools was stripped of its powers in December 2016…. Now (in 2018), that same accrediting council is asking to be reinstated by the Trump administration as a federal gatekeeper for hundreds of degree-granting programs and billions of dollars in federal funds… Most public, private and nonprofit higher education institutions are regionally accredited, while national and specialized accreditors tend to draw for-profit and trade schools. To receive federal financial aid… schools must be accredited by an Education Department-recognized agency. The Accrediting Council for Independent Colleges and Schools was responsible for about 240 institutions that received $4.7 billion in taxpayer money when it came under scrutiny in 2015.”
Of course, as it seeks to be re-approved, the Accrediting Council claims to have cleaned up its act. When its new director Michelle Edwards submitted a request last September, asking the Department of Education to reinstate the agency as an approved accreditor, Douglas-Gabriel quoted Edwards promising that the agency had improved its collection of student data and improved its examination of the outcomes of graduates of the for-profit schools: “(T)he council heralded increased on-site evaluations, removal of board members with conflicts of interest, new leadership and stepped up enforcement actions.”
In February, prior to DeVos’s early-April agreement to reconsider the Accrediting Council’s request once again to be an approved accreditor, the Century Foundation sued the Education Department to block the Department’s reinstatement of the Accrediting Council. Douglas-Gabriel describes the concerns of the Century Foundation’s Robert Shireman as he explained the basis of the lawsuit: “The council was rife with conflicts of interest. Many of its commissioners worked as executives at Corinthian Colleges and ITT Technical Institute, schools accredited by the agency. It let for-profit colleges under investigation for alleged fraud or with rock-bottom graduation rates receive billions of dollars in federal student aid, including Corinthian, ITT Tech and FastTrain College. All of those schools remained accredited until the day they closed.”
Betsy DeVos has granted the Accrediting Council several more weeks to submit evidence for its reinstatement. She has said that officials at the Department of Education will make a decision before July 30.
If you are a libertarian who has declared, as DeVos claimed in 2015, that, “Government really sucks,” one way to eliminate the role of government regulation is to put foxes in charge of the hen house.