The Department of Defense recently sanctioned the University of Phoenix by suspending it from participation in the U.S. Military's tuition benefits program. Why? Allegedly, Phoenix sponsored improper recruiting events and inappropriately used the DOD's seal.
Senators John McCain, Jeff Flake and Lamar Alexander got involved in this matter on behalf of whom? Soldiers? No--they came to the aid of the University of Phoenix. The senators argued that the university had only committed "vague, technical violations" that UP had already fixed or promised to fix.
According to the senators, "The University of Phoenix has a long history of serving working adults and others for whom traditional university schooling is unavailable" and noted that the university had more than 200,000 students in 17 states. But the senators neglected to note that almost 1.2 million University of Phoenix students have accumulated $35 billion in student-loan debt and that UP's five-year default rate is 45 percent!
Why do you suppose these old croakers came to the aid of the University of Phoenix? It is headquartered in Arizona, which might explain Senators McCain and Flake's intervention. But even so, don't these guys have an obligation to protect the University of Phoenix's students--not the university itself? And doesn't the Department of Education deserve support when it tries to rein in abuses to the federal student aid program?
The reason the for-profit college industry is out of control is because this rapacious sector of higher education makes strategic campaign contributions and hires lobbyists to protect its interests in Washington. I couldn't find any evidence that the University of Phoenix has made campaign contributions to Senator John McCain, but I did find evidence that McCain's biggest contributors include Goldman Sachs, which owns a stake in a for-profit college, and Bank of America, one of the biggest players in the private student-loan market.
If you want to better understand how the for-profit colleges have ripped off American taxpayers, you should read David Halperin's article in The Nation. "Many of America's for-profit colleges have proven themselves a bad deal for the students lured by their enticing promises--as well as for US taxpayers, who subsidize these institutions with tens of billions annually in federal student aid," Halperin wrote.
As Halperin explained, more than half of the students who enroll in for-profit colleges drop out within about four months. Many of these colleges have been caught using deceptive advertising and misleading information about job placement rates. And although the for-profits only enroll about 13 percent of postsecondary students, they account for nearly half of student-loan defaults.
How do they get away with this? By hiring lobbyists and making campaign contributions to powerful federal legislators. According to Halperin, the industry's lobbyists include past Senate majority leader Trent Lott and Penny Lee, a former aid to Senate majority leader (now minority leader) Harry Reid. In fact, as Senator Dick Durbin put it, the for-profits "own every lobbyist in town" (as quoted in Halperin's article).
And why, you might ask, haven't supposedly independent voices in the higher-education policy world spoken out more forthrightly about the abuses in the for-profit college industry? Why hasn't Chronicle of Higher Education taken a stand? Why hasn't the National Urban League been more aggressive in its policy recommendations for higher education? Perhaps it is because the for-profits advertise in the Chronicle and Corinthian Colleges (now bankrupt) gave $1 million to the National Urban League.
As Halperin summarized at the end of his lengthy article, "There's a word for this state of affairs: corruption." And knowingly or unknowingly, Senators McCain, Flake and Alexander came to the aid of one of the for-profit industry's worst actors: University of Phoenix. Senator McCain deserves this nation's respect for his heroism in the Vietnam War. How sad and how shameful to observe him in his dotage serving as a shill for the for-profit college industry.
Adam Looney & Constantine Yanellis. A Crisis in student loans? Brookings Institution, September 10, 2015. Accessible at: http://www.brookings.edu/~/media/projects/bpea/fall-2015_embargoed/conferencedraft_looneyyannelis_studentloandefaults.pdf
David Halperin. The Perfect Lobby: How One Industry Captured Washington, DC. The Nation, April 3, 2014. Accessible at: https://www.thenation.com/article/perfect-lobby-how-one-industry-captured-washington-dc/
Senator John McCain Press Release. Senators McCain, Flake & Alexander Question DOD's Probation Decision Regarding the University of Phoenix's Participation in the Military Tuition Assistance Program. October 22, 2015. Accessible at: http://www.mccain.senate.gov/public/index.cfm/press-releases?ID=d7d2b065-3df2-42ce-9763-82ed0310a6e6
Senator John McCain's Top Contributors. Center for Responsive Politics. Opensecrets.org. Acessible at: http://www.opensecrets.org/politicians/contrib.php?cycle=Career&cid=n00006424
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