The Democratic party published a draft of its official platform last week that continues the Obama administration’s attack on for-profit higher education. The relevant section of the platform reduces the entire for-profit university industry to the Trump University case, claiming that the school “scammed many out of their hard-earned savings and led to no degree and no obvious benefit to their education or economic prosperity. Democrats will not tolerate this type of fraud.” In reality, however, it’s a different for-profit school that has captured the attention of Democrats.
In 2015, the Department of Defense and the Federal Trade Commission took aim at the University of Phoenix, with the former cutting off the school from its tuition assistance program for members of the military and the latter investigating several aspects of the college’s internal operations. The Democratic platform pledges to continue these sorts of crackdowns against bad for-profit schools. But as both the Chicago Tribune and Politico reported last week, President Obama’s best friend, golf buddy, sometime business partner, and chief presidential foundation planner Marty Nesbitt has purchased the University of Phoenix’s parent company—this after the administration’s assault on the mammoth pioneering for-profit school made it a good buy.
The University of Phoenix closed campuses, cut recruiting, and lost many thousands of students as a result of Department of Education regulations under then-Deputy Education Secretary Tony Miller. The value of the college’s parent company went down by 90 percent as a result, and then Miller left his post at the Department of Education in 2013 to become partner and then COO at Vistria Group, Nesbitt’s firm.
Now, Nesbitt is lobbying senators to ease off on regulating for-profit schools, for the good of Vistria’s deal. Senators, meanwhile, remain open to the likelihood that it’s at least as bad as it looks. “It raises the appearance of impropriety,” Senator Dick Durbin, Illinois Democrat and longtime opponent of for-profit schools, told the Tribune. Politico quotes Senator John McCain underlining the obvious: “I know it was the attacks that drove the stocks down.”
At the Washington Free Beacon, Matthew Continetti analyzed the episode: “Economists have a term, regulatory capture, that describes what happens when an agency is overrun by the industry it seeks to control. What’s happening here is the reverse: a company being bought out by the very people who used to regulate it. It’s as if Lisa Jackson suddenly announced that she was buying ExxonMobil with financing from Tom Steyer. For too long, I can hear Jackson saying, the oil industry has been characterized by pollution, work hazards, and political influence. But everything will be fine when I’m in charge.”
It’s possible the next president could also find a way for her friends to benefit from tighter regulations on for-profit colleges. Bill Clinton’s longtime ties to the for-profit education firm Laureate International suggests that if the DNC platform’s proposed regulations drive down Laureate to a rock-bottom valuation, a Clinton friend might want to snap up the firm. Hey, it’s one way to “pass the baton.”
