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Bankruptcy protection should come first

Halperin’s piece regarding the for-profit sector is spot on, and I’m glad to see it. There is one point, however, that is simply wrong and I was disappointed to see him make it: that the “new and improved” gainful employment legislation recently proposed will help.

The first gainful employment rule was lobbied into soft oatmeal, and was absolute mush by the time it made it through the legislative/administrative/judicial process. This issue sucked all the air out of the room for over a year, yet the problem is as bad or worse than it has ever been.

To posit that the same thing won’t happen again is, frankly not believable. As long as the Department of Education’s fiscal motivations are aligned against the student (the department makes money on defaults, and in fact was(and perhaps still is) making more on defaults than healthy loans), it is not realistic to expect a significantly better outcome the next time around.

Let’s return bankruptcy protections, and get the motivations fixed before doing anything else, can we please? We can’t waste another year or more for nothing.

One side note: David hopefully will be shocked to know that Devry is a corporate donor of the Center for American Progress (along with the Blackstone Group, Goldman Sachs, Citibank, Wells Fargo, and WalMart!). CAP’s higher ed policy is being led by a longtime Dept. of Ed lending guy, and an “Alexander Hamilton” fellow from the Federal Reserve Bank. They recently came out clearly against returning bankruptcy protections to the people as well.

It’s not just the for-profit colleges we need to be looking at, I think.

Alan Collinge

Washington State

Apr 3 2014 - 4:06pm

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