By Richard Vedder
Many Democrats don't trust markets and prefer public solutions to private ones, so I suppose the assault on private for profit higher education should not be surprising. But it is threatening the single part of higher education that focuses on student needs with laser like intensity, the sector that is most efficient, and that disproprtionately serves lower income Americans whose parents never went to college.
First came the assault on the private loan providers. Obama wanted to put them out of business, and largely succeeded. Then there is the harassing of the smaller for profit start ups. I get nearly daily missives from Dick Bishirjian of Yorktown University. First was the accreditor/Department of Education threat to make on-line providers get licensed in every state that they operate. This imposes enormous costs, creates barriers to entry, restricts competition, and raises fees to the mostly lower income recipients on the educational services. Yesterday, Dick told me that the Dodd financial reform bill would make Private Placement equity financing nearly impossible --precisely the type of funding most for profit start ups get to begin business.
But then that old Enemy of the People, Bob Shireman, struck again. Bob is the Deputy Under Secretary of Education in charge of harassing the for profits. I once chided him that he was the only person I knew personally who could and did destroy $200 million in wealth in the manner of seconds by his utterances. Two days ago, he beat that record easily, wiping out over a billion dollars of wealth instantly by his bellicose attacks on the for profits and their accreditors, saying, as if it were a crime, that the for profits are having enormous gains in Pell Grant recipients. Rather than applauding their reaching out to a market that most of his beloved not-for-profit public schools ignore, he berates them, likening them (if news accounts are to be believed) to Wall Street predators. Apollo stock fell six percent in minutes; Corinthian Colleges fell almost 10 percent.
As one person correctly said at the conference of the Annointed in Higher Education that I attended yesterday (why I was invited, I am not sure), it is mathematically impossible to achieve the Obama college attainment goals without greatly expanding education of adult learners, yet the administration harasses the very people who are doing the most in achieving that goal, all because of a near pathological hatred of free market capitalism. The November elections should be interesting.