Florida Attorney General Pam Bondi is joining her Kentucky colleague Jack Conway in waging a war on for-profit colleges – with taxpayer funds – while turning a blind eye to problems in non-profit and state schools.  Except, in Bondi’s case, there are demonstrable instances of mismanagement, fraud, and abuse in those taxpayer-funded colleges that she appears to be ignoring for the time being.

A few examples of taxpayer waste that Bondi should be focusing on:

• State-funded Daytona State College, Florida A&M University, Edison State College, and Miami-Dade College all currently face losing their accreditation due to issues ranging from low performance standards to admitting students without required courses to employing too few professors.

• Florida’s biggest state universities are under fire for rampant abuses within their athletic programs.  Numerous Florida State University athletic teams have been forced to vacate wins due to academic misconduct, while University of Miami athletes have been discovered accepting illegal gifts and money.  The University of Central Florida is also under investigation for recruiting misconduct.

• The Florida state college corruption extends all the way up to state elected officials; former Florida House Speaker Ray Sansom came under fire for securing funding for a building at Northwest Florida State College that was in fact an airport hangar for political donors’ private jets.

Sounds like enough material for some high-profile state investigations, right?  Actually, Attorney General Bondi is focusing her government investigation on a handful of small, for-profit schools.  The charges against the schools largely revolve around allegedly false claims used by recruiters leading to enrollment of students who were under-qualified and/or unable to repay their loans upon completion.

Could it be that Bondi and others, including federal regulators, are attacking for-profit colleges chiefly because they have taken a piece of the higher education pie in recent years that was traditionally serviced by state-run community colleges and vocational schools?  The fervor with which state officials in Florida, Kentucky, Texas, and other states are going after for-profit schools suggests motivation beyond the desire to prevent a few gullible students from falling for glitzy ad campaigns.

At the federal level, the Department of Education’s proposed ‘Gainful Employment’ rule would create new narrow metrics to define “gainful employment” based on student debt-to-income levels and loan repayment rates.

What the DOE’s formulaic approach is missing is that these institutions serve student communities with significant risk factors such as low incomes, full-time employment, and delayed enrollment which adversely impact degree attainment and account for their having a higher loan default rate than less inclusive institutions.  Even with these challenges, the fact remains that for-profit colleges have a better record of graduating low-income and minority populations than public institutions and private, not-for-profit schools, at a substantially lower total government and taxpayer cost.

The objective of having community colleges is to provide low-cost education to those who, for whatever reason, find four-year universities inaccessible. The idea behind supporting and subsidizing non-profit community colleges seems to be to give opportunity specifically to low-income students, those who require flexibility in education and those looking to acquire real world skills without the protracted course of study offered by full-time four year universities.

Beyond that, these schools are most-definitely not for profit, which should take them off the government’s radar when it comes to budget cuts and federal loan determinations. They are nearly the perfect fit for the administration’s alleged commitment to bettering the quality of life for all Americans, since they eat up taxpayer funds and require intense oversight, yet their non-profit status allows them to function outside of the market, allowing the ranks of teachers to become permeated with the unqualified and, more importantly, the Democratic, without fear of backlash from consumers. In short, their format and existence is beloved by the Department of Education.

And yet, they, too, live in fear of the administration’s heavy hand.

More than one million community college students in 31 states do not have access to federal student loans because their institutions choose not to offer them, according to a new report by the Project on Student Debt. (The report is a followup to a 2008 study by the group, and finds modest changes since then.) Many community college administrators fear that participation in the federal loan program would put their students at risk of losing federal financial aid if too many students at the institutions do not repay their loans. The report notes that there are “persistent racial and ethnic disparities,” with nearly one in five Native American students and one in six African-American students attending community colleges that do not participate in the federal loan program.

That fear stems from the administration’s recent and ongoing attack on for-profit colleges. Looking to run the institutions out of business, officials in the Department of Education, their cronies in Congress and a host of characters from Wall Street and beyond have been looking for ways to destroy the institutions’ student body. Their most effective weapon? The so-called “Gainful Employment” rule, which ties available federal funding directly to the success for-profit college graduates have in finding a job. Never mind that four-year institutions, which as of late have had miserable job-placement rates, have seen federal student loan increase even as the economy has declined, or that for-profit colleges tend to serve the under-privileged, lower-income and minority communities, they’ve continued with their attacks unabated. Now, community colleges, who face the same hurdles as for-profits, fear that the administration will respond to their rates of success with a similar backhand.

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The Obama Administration’sDepartment of Education has been working for months on an attack that would severely cripple career colleges in the United States, schools that help American students pursue educational options outside of the four-year non-profit universe.

Charging that these career colleges mislead students into believing they’ll obtain employment upon graduation, and that these schools mislead students into taking on debt, the Administration has proposed a “gainful employment” rule that would severely limit students’ financial aid options if they chose for-profit colleges over the Administration’s preferred four-year university route.

According to sources, the “gainful employment” proposal has been fueled by reports from the U.S. Government Accountability Office (GAO) as well as news media that have painted the career university system as predatory. However, many of these reports, including the one from the GAO, were revised after questions were raised about the accuracy of their initial drafts – and many of these reports fail to provide information about similar tactics and return on investment data for four year schools, a mis-step that, this week, Jamie Farrell at Forbes brought to light.

As congressional talks surrounding the negative impact online education has had on graduation rates and specifically loan default rates; what we are not hearing are long term solutions. We are hearing suggestions of Band-Aids.

Do I like the idea of the gainful employment laws? Yes! That said, if we are going to implement them, it should be done across the board and it needs government support to get started. What these lawmakers are failing to recognize is that it took guts, innovation, large investments and a lot of time NOT being profitable for these for profit online education companies to get where they are today…and the model is less than TEN YEARS OLD.

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