Obama Administration Caved On For-Profit College Regulations, Insiders Say

A year ago, the Obama administration crafted a set of proposed regulations aimed at limiting abuses by the swiftly growing for-profit college industry.

The initial draft threatened severe consequences for institutions that churned out large numbers of graduates with outsized debts and meager job prospects: Schools would quickly lose access to the multi-billion dollar pool of federal student aid dollars that supplies the vast majority of their profits.

But when the Department of Education delivered the final rules earlier this month, they were substantially weakened from the initial draft, adding a three-year grace period before severe sanctions will kick in -- a major triumph for the industry’s lobbyists and their relentless pressure campaign on the Obama administration.

Those familiar with the deliberations say the industry successfully convinced the Obama administration to soften the rules by sowing fears that a stricter approach would prompt Congress -- also the target of intense lobbying -- to step in and revoke the regulations altogether.

“It’s absolutely accurate to say they caved in to the industry,” said Robert Shireman, a former deputy undersecretary of education, who was involved in crafting the original draft of the regulation. “But I understand the political dynamics of being in an administration and needing to take a step forward in the face of a hostile Congress. The right thing for this issue is for it to survive.”

A Department of Education spokesman declined to comment directly on Shireman’s assessment, but defended the regulation, saying the rules will go a long way toward “Helping programs improve, weeding out bad actors in the industry and protecting the interests of students and taxpayers.”

The industry's lobbying was so well-financed and well-coordinated that it altered the view of what was possible inside the Obama administration: The focus shifted from seeking to craft the strongest rule to instead making do with incremental progress, avoiding the sort of action that would trigger congressional intervention aimed at protecting the industry.

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Source: Huffington