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Stories You Don't Want to Miss: Part 2 of Our Roundup of For-Profit College Coverage

Published:  January 13, 2011
Issues:  

Yesterday at Higher Ed Watch, we highlighted two noteworthy articles that were published while we were on winter break that have implications for the raging debate in Washington and in our nation’s news pages about for-profit higher education. These pieces focused on Kaplan University, and its controversial relationship with The Washington Post.

Today, we are going to finish up our review by drawing your attention to articles involving the huge lobbying campaign that the career college sector has waged against the Obama administration’s efforts to rein in the industry.

So again without further ado, here is the second and final part of our roundup this week of news stories and commentary we don’t want you to miss on for profit higher ed:

An All-Star Roster of Lobbyists Goes to Bat for the Industry

In late December, BusinessWeek revealed that the for-profit higher education industry spent nearly $4 million on lobbying in the first nine months of 2010 --- more than double the amount it spent during the comparable period the year before. With such a large war chest, the magazine reports, the biggest chains of for-profit colleges have assembled a dream team of former lawmakers to go head to head with the Obama administration over regulations it has proposed that aim to stop career colleges from saddling their students with unmanageable levels of debt.

Unsurprisingly, the for-profit college companies that opened their wallets the widest are those that appear to have the most to lose if the U.S. Department of Education moves forward with its proposed “Gainful Employment” rules. So it’s not a shock that Corinthian Colleges, with its poor student loan repayment rates, tops the list, having spent $570,000 during this period on influence peddlers, according to the magazine. Other top spenders include Career Education Corporation, $540,000; the Washington Post Co., which owns Kaplan University, $470,000; and Education Management Corporation, $410,000.

As the article notes, the industry’s main focus over the last year has been to persuade Congressional Democrats to break with the White House on the proposed rules. So who could better help them achieve this goal than these lawmakers’ former colleagues?

With that in mind, Corinthian appears to have made the biggest catch, reeling in Richard Gephardt to lobby on its behalf. Yes, you read that right -- the very same Richard Gephardt who served as the House Majority Leader from 1989 to 1995 and then as Minority Leader until 2004. We can’t imagine that there are many House Democrats who would refuse a visit from their former leader.

Education Management also made a deft move in hiring former Pennsylvania Democratic Congressman William Gray to help lead its fight against the proposed regulations. Gray, who in 1991 left Congress after 13 years to take charge of the United Negro College Fund (a position he held until 2004), is especially influential with the Congressional Black Caucus (CBC), of which he was a member.

Gray is one of at least three former black caucus members who are lobbying for the industry. The other two are Albert Wynn, the former Maryland Democratic Congressman who, the magazine reports, is working for Bridgepoint Education (the owners of Ashford University), and Alan Wheat, the former Texas Democratic representative who has long lobbied for the University of Phoenix. Meanwhile, Paul Brathwaite, the CBC’s former executive director, is part of the Podesta Group team that lobbies on behalf of the industry trade group that used to be known as the Career College Association.

According to BusinessWeek, other former lawmakers lobbying for these for-profit college chains include:

Democrats:

Republicans:

With the stakes so high for these companies, it’s understandable that they have spared no expense in their lobbying blitz (although it would be nice if the victims of these schools had the luxury of being able to hire former lawmakers to help them get their voices heard). Having said that, it’s also important to understand that the bulk of the money they are lavishing on these former lawmakers comes from U.S. taxpayers, in the form of federal financial aid. In other words, most of these companies are raking in huge sums from the federal student aid programs, and then turning around and spending a bunch of it on high-paid lobbyists, whose job it is to make sure this federal money continues to flow to even the worst of the worst of these schools. Everybody wins, but students and taxpayers. True fiscal conservatives should be outraged.

Attack Dog for the Industry Comes Under Fire

Over the last six months, there has not been a more outspoken attack dog for the for-profit higher education industry than the lobbyist and “spinmeister par excellence” Lanny Davis. Since creating the Coalition for Educational Success last summer with the help of Education Management Corporation, the former Clinton administration lawyer has been on a one-man crusade to try and prove that there is a vast conspiracy among consumer advocates and Wall Street short-sellers to take down the schools that have put him on retainer. He hasn’t accused anyone of treason, but he just might not have gotten around to it yet.

Over the Christmas break, however, it was Davis who found himself under fire for some of the reprehensible foreign dictators and strongmen he has agreed to represent. The New York Times went further, running a front-page article questioning his entire client list. Summing up the controversy, the Times wrote:

Since leaving the White House, Mr. Davis has built up a client list that now includes coup supporters in Honduras, a dictator in Equatorial guinea, for-profit colleges accused of exploiting students, and a company that dominates the manufacture of additives for infant formula. This month, he agreed to represent the Ivory Coast strongman whose claims to that country’s presidency have been condemned by the international community and may even set off a civil war.

Mr. Davis withdrew from his $100,000-a-month contract with the Ivory Coast on Wednesday night, saying that the embattled government refused to accept his suggestion to talk to President Obama. Still, his role in West Africa has stoked growing criticism that Mr. Davis has become a kind of front man for the dark side, willing to take on some of the world’s least noble companies and causes."

In response to the criticism, the Times quotes Davis as saying:

“My credibility is the only thing I have. If I defend people in indefensible, corrupt acts, then I lose everything I have, and I’m just another gun for hire.”

We’ll leave it at that.

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