For-profit colleges have had it made the last few years. But that could change come January if Joe … [+]
For-profit colleges have had it made the last few years.
After years of scrutiny and tougher regulation, many for-profit executives made a sigh of relief when Trump—the owner of an unaccredited for-profit college—was elected. Stocks at various for-profit colleges jumped after the election.
They were especially happy when Trump’s Education Secretary Betsy DeVos hired various former for-profit lobbyists and administrators to work in the administration. Steve Gunderson, a former Republican Congressman and head of a for-profit college industry association, said “it’s guaranteed that they will be more friendly.”
But that could change come January.
If Joe Biden and Kamala Harris are elected in November, for-profit colleges will be facing an administration that isn’t as sympathetic to the industry. For-profit higher education experienced the toughest regulation and oversight during the Obama administration. They’ve worked tirelessly—and successfully—to lobby the DeVos Department of Education to roll back those regulations since DeVos took office.
But the industry has been fearful that if Biden returns to office, he would reinstate many of those rules. And Biden wants to.
When he first announced his higher education plan in the primary, Biden promised to stop for-profit colleges from “profiteering off of students.” He pledged that the schools would have to prove their value to access federal student loans and grants—a nod to the Obama administration’s “gainful employment” rule—and that he would close the 90/10 loophole that incentivizes for-profit colleges to recruit veterans to skirt the limited federal accountability that exists today.
This spring, Biden and former rival Bernie Sanders announced an education unity task force to develop policy recommendations. The recommendations released in July promised to crack down on for-profit colleges. The task force even singled out the Trump administration for letting for-profit colleges “prey upon students with impunity by repealing important protections.”
Biden’s pick for his running mate likely provided reassurance to the for-profit college industry that a Biden administration would be less friendly that the current one because Senator Kamala Harris has a strong record of taking on for-profit colleges.
As California’s Attorney General, Harris took on the now defunct Corinthian College and received a $1.1 billion judgement against the company for their predatory practices of misrepresenting the outcomes of their students to recruit more. The findings from her investigations formed the basis for many of the borrower defense claims that led to students receiving loan forgiveness due to the company’s unlawful actions.
In her memoir released last year, “The Truths We Hold,” Harris highlighted her work. “As far as I was concerned, this conduct was no different from the criminal predators I’ve known—purposely targeting those most in need,” she wrote describing the actions of Corinthian. Harris even touted her work in her convention speech last month. “I took on the biggest banks and helped take down one of the biggest for-profit colleges,” she said proudly. “I know a predator when I see one.”
If Biden and Harris are elected, their choice to run the Department of Education will also matter. There is no apparent frontrunner for the job, but many of the contenders mentioned have a strong record against for-profit colleges.
For example, Senator Elizabeth Warren has fought them throughout her time in the Senate. As a presidential candidate, she proposed eliminating their eligibility for student aid. It was even reported that for-profit college stocks fell when she was performing well in the polls. Former Secretary John King helped implement many of the for-profits regulations in his roles at the Department and could come back to reignite those same rules.
The election is just 50 days away and the race is still tight. It’s too soon to know who will run the Education Department after January 20th, but for-profit college executives are already worried about a potential Biden win. As Steve Gunderson, the for-profit industry head thankful for the Trump administration, recently told Inside Higher Ed, “It’s alarming. Concerning. The future of the sector is at stake if there’s a totally Democratic government.”
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