Collegiate Cronyism

The Obama administration has announced a new scheme, which places one set of standards on for-profit colleges and universities and another – or rather none on traditional four-year non-profit colleges and universities. This approach skews the playing field, rewards the President’s political allies in academia and punishes those who are educating less traditional higher education demographics.

As the Wall Street Journal editorialized today:

“President Obama likes to say that everyone in America should ‘play by the same rules.’ Okay, so then why does the Administration’s new student-loan rule apply to for-profit colleges, but not nonprofits?

“The regulations that go into effect in July cut off federal student aid to career and technical colleges whose former students don’t meet the Education Department’s definition of ‘gainful employment.’ Education programs would be cut off from the government trough if their former students don’t meet one of three thresholds for three out of four years: They must have at least a 35% loan repayment rate, 30% debt-to-discretionary-income ratio, or 12% debt-to-annual earnings ratio.”

The White House offers as a justification for its new rules by saying that they are looking to protect taxpayers. If this were truly the case, they would apply the rule across the board to all colleges and universities that receive student aid.

As I laid out in a Red State post last week, continuing to fund a broken system will only push prices higher and is in fact not a solution at all:

 “There is a clear lack of accountability within the higher education sector that has led to the unbridled tuition and fee increases that are burdening millions of Americans.  Some have insisted on throwing tax dollars at the problem, this has been done in the past and has only perpetuated the issue.  Others, however, are coming together around a different model, one that holds colleges and universities accountable, rewards student-focused programs, and promotes outcome-based funding.”

We must fix the skyrocketing price of a higher education, not just cover up the true costs. We will not achieve this by applying a set of standards on one set of schools while ignoring the myriad of problems at another.

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