At The Heart Of The Scandals Roiling The For-Profit Educational World: John Kline

Compliments of John Kline (R-MN)

Earlier today I spent some time on the phone speaking with Angie Craig, a candidate for Congress from southeast Minnesota, MN-02, which butts right up against St. Paul. The seat is currently occupied by one of the worst Members of Congress, John Kline. Behind Angie's progressive ideals and her determination to help government work for regular working families, I sensed a passion and a commitment to clean up the mess Kline is leaving in his wake, particularly to the nation's education system. Angie talked about it a lot, as we do here at DWT.

As chairman of the House Education and Workforce Committee, Kline has done more damage to the education system and to the lives of millions of young people than anyone else I can think of. An editorial in Thursday's NY Times never called out Kline by name, but there should be no doubt that the writer had John Kline firmly in mind when he wrote "Predatory Colleges Find Friends In Congress." Hold onto this while you read it: In the last election cycle, Kline raised $2,185,735 by mid-summer, most of it special interest money— and only 6% in small contributions. Kline’s single biggest source of cash is… the education industry— $284,499, more than double his second biggest contributor industry, the banksters. His single biggest donor last cycle was Apollo Education Group (University of Phoenix) for a nice $28,100. Other for-profit “universities,” which profit by ripping off their students, that contributed big bucks to Kline include ITT Educational Services, Globe University, Full Sail University (owned by TA Associates, a private equity firm), Herzing University, DeVry, Education Management Corp., Association of Private Sector Colleges and Universities, Capella Education and his pals at Corinthian Colleges, a real doozy of a criminal enterprise.

A Federal District Court judge in Washington on Tuesday upheld new Obama administration rules that will deny federal aid to career training programs that saddle students with crushing debt while giving them useless degrees in return.

The ruling strongly reaffirms the government’s authority to regulate these often-corrupt programs-- and comes at a time when federal and state investigations are uncovering fraud and misconduct by for-profit schools all over the country. Regrettably, however, Republicans in both houses are moving bills that would block the Obama administration from enforcing the rules.

The court ruling involved the administration’s “gainful employment” rules denying federal aid to programs that have historically burdened students with loans well beyond their capacity to repay. The rules were inspired by data showing that students in for-profit schools account for only about 12 percent of college enrollment, but nearly half of student loan defaults. Other data has shown that graduates of for-profit institutions are more likely than graduates of other institutions to carry debt of more than $40,000 when they leave school. Predatory schools are all the more problematic because they target veterans, minorities and the poor.

The rules cover about 5,500 career training programs, some of which award college degrees but most of which award certificates. To comply, a training program would have to show that, on average, the annual loan payments of its graduates amount to less than 8 percent of their total income, or less than 20 percent of their discretionary income, after the cost of basic necessities like food and housing.

A program that failed to satisfy these criteria for four straight years would lose federal funding. Funding would also be denied if, over two years of a three-year period, the average loan payments exceeded 12 percent of total earnings and more than 30 percent of discretionary earnings. Programs nearing these thresholds would have the further obligation of giving students and prospective students advance warning that they are at risk of losing their federal grants and loans-- and might need to find some other way to pay for college.

The rules cover both for-profit and nonprofit programs. But the Department of Education estimates that 99 percent of the 1,400 programs that would probably fail under the new standard are run by for-profit schools.

An association representing the schools challenged the new rules, arguing that the standards were capricious and that the only permissible measure of “gainful employment” is whether or not the student got a paying job-- any job. The judge was openly contemptuous of this argument.

Republican attempts to block the new rules are not sitting well with organizations that work on behalf of consumers, veterans and the poor. This spring, a coalition of these groups sent a letter reminding Congress that 37 state attorneys general are jointly investigating allegations of fraud in for-profit schools. Various investigations have already uncovered deceptive tactics; dismal graduation rates; false or inflated job placement rates; and dubious sales and admissions policies that target veterans and students of color.

At issue here is an industry that routinely exploits the country’s most vulnerable citizens and fleeces the federal student aid program at the same time. The administration’s effort to bring it under control deserves support, not legislative sabotage.

Kline, more than any other Member of Congress, carries water for this contemptible industry and their lobbyists. If Angie Craig beats him next year, she'll be providing a tremendous service not just to the folks in Minnesota but to the entire nation.

And let's not forget America's worst governor, Scott Walker, and what he's doing destroy Wisconsin public education system. Watch this: