Bad Actors on Both Sides. . . .

If you thought this headline reflected the words of President Trump following Charlottesville, you guessed incorrectly. The statement is part of one made by Education Secretary Betsy DeVos in response to a question from Senator Richard Durbin (D-IL) during a recent committee hearing. The topic was the Department’s efforts or lack thereof in processing student debt relief applications for defaults, mostly for students who attended for-profit institutions. A bit more background:

Harvard University was founded in 1636 and Yale in 1701. Under the Morrill Land Grant Act of 1862, the federal government provided states with property to create colleges to foster education and research in agriculture, mining, forestry, mechanical arts, and veterinary science, among others. For the last 100 years under the nation’s tax code, virtually all of these institutions progressed from their founding to the present as not-for-profit organizations (NFP). NFP simply means that their incomes are not taxed and the designation reflects an economic and social policy with respect to the purpose, function  and mission of these institutions. This model of higher education in the United States, it may be fairly stated, has worked quite successfully.

ITT Technical Institute (originally a wholly-owned subsidiary of International Telephone and Telegraph Corp.) was founded in 1946 and was the subject of an initial public offering (IPO) in 1994. Corinthian College was founded in 1995. Both organizations operated as profit-making entities while receiving millions of federal dollars by way of tuition under a variety of legislatively mandated educational programs. Employing aggressive sales and marketing techniques, as any profit-making organization might, both managed to increase enrollments and government tuition income. At the same time, questions arose concerning curricula, student progress and graduation rates, as well as post-instruction employment.

According to Education Department data, about 9 per cent of high school graduates attend or enroll in for-profit colleges and universities. However, 34 per cent of all loan defaults occur with students at such for-profits. Under the Obama administration, ITT and Corinthian went bankrupt, and the Education Department created a loan-relief program which, under DeVos, had thousands upon thousands of applications pending. Critics cited a “slow walk” by DeVos, reflecting her favorable view of for-profits. By October 2018, a federal judge had ordered the Department to address the backlog, holding that its foot dragging was illegal. Notwithstanding, the delays continued and DeVos was pressed to respond to Senator Durbin’s inquiry into the delay. So, here’s what DeVos replied:

No student should be defrauded, and if fraud is involved there are consequences, and there will be consequences. But we should not be judging institutions by their tax status. Let’s  be very honest here: there are bad actors on both sided of the equation. [Emphasis added.]

Thus the Secretary of Education reveals that pursuant to some moral equivalency, serving defrauded students from for-profit colleges must wait while the bad actors in NFPs are also called out. Who would ever imagine that a response to a racial incident in Virginia would also apply to defrauded students? But, then, like leader, like follower.



Categories: Issues, Local, National

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