Campus Progress Responds to For-Profit Industry’s Self-Policing

Some bad actors in the for-profit college industry have spent the last decade becoming wealthy by abusing students and taxpayers. Their programs have been characterized by deceptive recruiting, fraudulent reporting, high prices, low graduation rates, and huge loan default rates.

Suddenly, one for-profit education trade group has seen the light and today “announced it is working on a comprehensive Standards of Responsible Conduct” that will “serve as a model for all institutions of higher education.”

We’re glad that the group, the Coalition for Educational Success (CES), now seems to admit it has a problem.  It would have been better if CES had done so before years of bad practices with thousands of victims, and before the industry spent millions of taxpayer dollars lobbying to resist accountability.  It would have been better if CES had proposed reforming itself before its back was to the wall—before the recent action in Congress to block a budget rider that would have allowed the industry to escape accountability and before the Department of Education reaffirmed that it will shortly issue a final “gainful employment” rule to address abuses.

CES has recruited some outstanding public servants, former Governors Edward Rendell (D-PA) and Thomas Kean (R-NJ), to assist with this effort.  But before Americans decide to delegate governance of higher education to CES, consider some background on the group.

CES was originally led by long-time DC lobbyist Lanny Davis, hired in 2010.  Davis, who proudly proclaims himself a “liberal Democrat,” has a history of representing morally questionable clients, most recently, for a time, the Ivory Coast dictator Laurent Gbagbo. Earlier this year, CES got a new leader, Penny Lee, another Democrat and a former aide to Senate Majority Leader Harry Reid and…wait for it…Governor Rendell.

In parallel with the advocacy group Citizens for Responsibility and Ethics in Washington (CREW),  whose own executive director Melanie Sloan was at one time headed to work for Lanny Davis’ firm, CES has filed complaints making numerous spurious claims about the Dept. of Education’s connections to Wall Street short-seller Steven Eisman.  These complaints seem aimed at distracting the public and the media from clear misconduct by the for-profit industry, including companies that are members of CES:  

• Earlier this month, the state of Texas took action against CES member ATI after a series of investigative reports by WFFA-Dallas TV uncovered widespread violations of job placement reporting.
• ITT Technical Institute encourages recruiters to use a “pain funnel” to scare and shame prospective students into enrolling in the school. Once enrolled, students are often provided with a lackluster education and left with insurmountable amounts of debt.
• CES member Education Management Corporation, LLC, which owns the Art Institutes, has a history of high default rates for many their schools, and in 1999 settled a lawsuit filed by over 200 students against its Houston campus, which claimed they had been defrauded out of a quality education.

We also think that CES’s statement should have disclosed the ongoing relationship between Governor Kean and the for-profit education industry: As Politico reported: “Thomas H. Kean served as governor of New Jersey, 1982-1990, when he implemented more than 30 statewide education reforms. He was president of Drew University from, 1990-2005, and chairman of the federal 9/11 Commission. He is now a general partner at Quad Partners, which invests in privately-owned education companies, including career colleges, and is an advisor to the Coalition for Educational Success.”  

We hope the effort announced today by CES will be a step in the right direction.  We would be pleased to offer our views, our research, and our experience working with former students and employees of for-profit schools.

But, if the Wall Street collapse taught us anything, it is that self-policing is at best ineffective, and at worst disastrous.  In this case, years of misconduct by the  for-profit education industry, including CES members, makes us even more skeptical. 

David is the founder and former director of Campus Progress. Katie is the Communications and Outreach Manager for Campus Progress.

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