Amid scandals, Education Department finalizes regulation on for-profit schools

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Daily Caller:

Department of Education Sec. Arne Duncan is finalizing a controversial new regulation on for-profit, or “career,” colleges, issuing final rules Wednesday that condition federal aid to students of the schools to numeric thresholds on how much debt they incur or how quickly they repay the loans after attending.

The regulation is at the center of a bitter feud between the Obama administration, left wing interest groups and Wall Street “short sellers” on the one side pushing the rules, and lobbyists for the for-profit schools on the chopping block on the other pushing against them.

The administration has scored major hits in revealing sleazy sales techniques and even outright fraud on the part of some schools.

But industry representatives have unearthed a disquieting role played by Wall Street investors in pushing the regulation and forced the Government Accountability Office to issue a slew of corrections to an error-ridden report it issued at the behest of far left Democratic Sen. Tom Harkin of Iowa.


The scandals have led to at least two investigations: by the Education Department’s Inspector General regarding the role of the short sellers, who are pushing the regulation because they will profit if the schools’ stock goes down, and by top GOP oversight official Rep. Darrell Issa of California, who is investigating an undercover sting unit at GAO behind the error-ridden report.