Phi Beta Cons

Paying for the Profits of the For-Profits

It turns out that the biggest supporters of the $30 billion for-profit college industry are Democrats. In response to the Obama administration’s attempt to impose restrictions on the huge flow of federal funds to these colleges and to tie it to their students’ ability to get jobs — as much as 90 percent of their revenue comes from federal aid while their student default rate is over 40 percent — the colleges spent more than $16 million to hire prominent Democrats with close ties to the White House to press their case, according to the New York Times

Among the lobbyists hired were Anita Dunn, a close friend of President Obama; Jamie Rubin, whose private equity firm has a stake in ATI, a for-profit college network based in Dallas; former Louisiania senator John Breaux; former House leader Richard Gephardt; and Tony Podesta, brother of Obama advisor John Podesta. Also exerting pressure on the White House were politically well-connected investors, including Donald F. Graham, chief executive of the Washington Post Company, which owns Kaplan University; and John Sperling, founder of the University of Phoenix and a longtime friend of the House minority leader, Nancy Pelosi.

The cronyism has been successful in getting the administration to water down the restrictions. The article also reports that the for-profits were once small, local operations, but are now multistate networks owned by Wall Street firms looking for big profits, that is, looking to redistribute taxpayer money to so-called investors. Consumer groups that tried to rein in the networks were outmatched, probably because they didn’t have access to federal funds to pay for lobbyists. 

Most Popular

White House

The Problem Isn’t Just the GOP, Mr. Comey

During a CNN town hall on Wednesday night, James Comey alleged that the Republican party allows President Trump to get away with making inappropriate statements without holding him accountable. “If the Republicans, if they just close their eyes and imagine Barack Obama waking up in the morning saying someone ... Read More
Law & the Courts

‘Judges for the #Resistance’

At Politico, I wrote today about the judiciary’s activism against Trump on immigration: There is a lawlessness rampant in the land, but it isn’t emanating from the Trump administration. The source is the federal judges who are making a mockery of their profession by twisting the law to block the Trump ... Read More
White House

Trump’s Friendships Are America’s Asset

The stale, clichéd conceptions of Donald Trump held by both Left and Right — a man either utterly useless or only rigidly, transactionally tolerable — conceal the fact that the president does possess redeeming talents that are uniquely his, and deserve praise on their own merit. One is personal friendliness ... Read More

Columbia 1968: Another Untold Story

Fifty years ago this week, Columbia students riding the combined wave of the civil-rights and anti-war movements went on strike, occupied buildings across campus, and shut the university down. As you revisit that episode of the larger drama that was the annus horribilis 1968, bear in mind that the past isn’t ... Read More

Only the Strident Survive

‘I am not prone to anxiety,” historian Niall Ferguson wrote in the Times of London on April 22. “Last week, however, for the first time since I went through the emotional trauma of divorce, I experienced an uncontrollable panic attack.” The cause? “A few intemperate emails, inadvertently forwarded ... Read More