Senate Republicans on Tuesday followed through with their promise to boycott a hearing that the chamber’s Health, Education, Labor and Pensions (HELP) Committee held looking at the inordinate amount of debt the most disadvantaged students are being pushed to take out at some of the country’s largest chains of for-profit colleges. The panel’s Republicans said they chose not to attend because they believe that examination that the committee’s chairman, Sen. Tom Harkin (D-IA), has been conducting of the for-profit higher education for the last 12 months has been biased against the sector. “The Majority’s singular focus on for-profit institutions is ignoring more widespread problems in higher education,” they complained in a letter to Senator Harkin in April.
But at Higher Ed Watch, we think that Sen. Mike Enzi, the committee’s top Republican, and his colleagues have an ulterior motive: to try and discredit an investigation that has revealed just how much damage their efforts to deregulate the industry over the past decade have caused both students and taxpayers.
In 1992, Congress added a number of consumer protection provisions to the Higher Education Act aimed at protecting students and taxpayers from unscrupulous trade schools that were set up solely to reap profits from the federal student aid programs. At the time, there were rampant reports that proprietary institutions were enrolling students straight off of the welfare lines and pressuring them to sign up federal student loans they had little hope of ever repaying.
But before the ink on the reauthorization legislation was even dry, career-college lobbyists began their campaign to get Congress to chip away at these provisions. This effort went into overdrive after the 2000 president election, when Republicans found themselves in control of both the White House and Congress for the first time in decades.
Sen. Johnny Isakson (R-GA), the fourth-ranked Republican on the Senate HELP committee, got the ball rolling in 2001 when, as a Member of the House, he pushed “The Internet Equity and Education Act” through the chamber. Among other things, the legislation would have significantly weakened provisions in the Higher Education in 1992 that barred colleges from compensating recruiters based on their success in enrolling students, and from participating in the federal financial aid programs if they offered more than half of their classes at a distance or enrolled more than half of their students in distance education courses.
The lead sponsor of the companion bill in the Senate was, as Campus Progress pointed out yesterday, none other than Senator Enzi. The measure, however, died in the Senate, after a moderate Republican Senator’s defection from the party put the chamber back under Democratic control.
In the wake of that failure, Bush administration officials in charge of the Department of Education decided to take matters into their own hands. While they couldn’t do anything about the so-called “50 percent rule,” they took the teeth out of the incentive compensation ban by issuing new regulations creating giant loopholes that allowed for-profit colleges to easily circumvent the law.
Around the same time, then-Deputy Education Secretary Bill Hansen sent a memo to the head of the Federal Student Aid office announcing that Education Department would treat violations of the incentive compensation ban less seriously than it had before. Hansen said in the memo that in most cases "the appropriate sanction" should "be the imposition of a fine," rather than the limitation, suspension, or termination of Title IV student aid eligibility -- language that was taken right out of the Internet Equity and Education Act legislation.
Despite a couple of failed efforts to overturn the 50 percent rule, Senator Enzi, who became the chairman of the Senate HELP Committee in 2005, remained steadfast in his determination to get it done. He pursued this goal over the objections of consumer advocacy groups and even the Education Department’s Inspector General who warned lawmakers against rushing to remove provisions from the Higher Education Act that were meant to safeguard the federal student-aid programs from fraud and abuse without carefully considering the ramifications of doing so.
But the Wyoming Senator and his Republican counterparts on the House education committee dismissed these concerns, and they finally succeeded in striking the 50 percent rule as part of the Deficit Reduction Act of 2005. They also pushed to significantly weaken the “90-10 rule,” which requires for-profit colleges to obtain at least 10 percent of their revenue from sources other than federal financial aid. Their efforts paid off in 2008, when the Democratic-led Congress agreed to soften the rule by, for example, stopping schools that exceeded the 90 percent limit from automatically becoming ineligible to participate in the federal student aid programs. Instead, schools now have to exceed the threshold for two consecutive years before they can be penalized.
Meanwhile, as Campus Progress noted, Enzi’s top legislative aide on higher education issues for much of this time, Scott Fleming, left his post in 2006 to join the Chartwell Education Group, where he and former Deputy Secretary Hansen lobbied for several years on behalf of the University of Phoenix, as well as several other for-profit colleges.
Senator Harkin’s hearings have shown that the failure of the Bush administration and these lawmakers to heed the Inspector General’s warnings helped lead to widespread abuses throughout the for-profit higher education sector and have put students and taxpayers in harm's way. Is it any wonder then that Senator Enzi and his colleagues would like to shift the Senate HELP committee's attention away from the for-profits and do all they can to discredit this important investigation?