The Wall Street Journal last week published an editorial that sheds light on the Department of Education’s continued hypocrisy and unsound reasoning when it comes to the regulation of the higher education sector.
Following last summer’s closure of Corinthian Colleges, one of the largest post-secondary education companies in the country, the Department of Education is now overseeing the sale of schools in the Corinthian system to Zenith Education Group, a just-created subsidiary of non-profit student loan guaranty agency Educational Credit Management Corporation Group (ECMC). Arguing that students were exploited by the colleges and left without recourse to address the otherwise unmanageable amounts of student loan debt incurred during their studies, the Department of Education asserts that it is acting in the students’ interest by this deal, which will allow them to finish their degrees and get some much-needed reprieve from their student loans.
While that position is laudable on the surface, the editorial makes an important eyebrow-raising point: ECMC has virtually no experience as a higher education provider. Its focus is on the student loan business. More troubling is the fact that Zenith Education Group was set-up as a non-profit. As such, it will be exempt from coming under Department scrutiny for one of the very things that for-profit Corinthian Colleges came under attack for – aggressive student debt collection practices.
It seems suspicious that, while the Department of Education insists on implementing the Gainful Employment rule with a stated goal of ensuring for-profit colleges offer quality educational programs, it handed over ownership of such colleges to a company that has little relevant experience and who itself has a questionable track record. Once again, an organization’s non-profit status serves to whitewash the practical, logical concerns.
As the WSJ editorial insinuates, such actions make it rather difficult to argue that the DOE’s intentions of regulating the higher education sector are wholesome and pure. Indeed, the very fact that it is profiting from the Corinthian sale by taking a 50 percent cut shows just how backward it can be.