The GAO report on fraud in the for-profit sector has set off quite a brouhaha. I’ve not said anything about it to this point because 1) I hadn’t read it yet and 2) it doesn’t seem particularly relevant to public policy making.
Regarding number 1, it has become clear that my personal preference of reading a study before being quoted on it is not shared by others. How else to explain all of the sermonizing about the evils of the entire sector with this quote from the report:
Results of the undercover tests and tuition comparisons cannot be projected to all for-profit colleges.HT: NM. Of course, I could just be a little touchy when it comes to reading a report before commenting on it.
Regarding number 2, the dominant view seems to be “That students were encouraged to commit fraud requires Congress to step in.”
I’m genuinely baffled by this view. My understanding is that in pretty much any other sector, when there is a discovery of fraud, it is dealt with by the legal system. Discovery of fraud only requires action by Congress to the extent that the existing laws governing punishment are too harsh or too lenient.
Why is it different when it comes to for-profit higher education? If there are no laws covering fraud in higher ed, or if those laws are insufficiently structured or enforced, than a case could be made for Congress to get involved, but their involvement should be focused on defining educational fraud and setting punishments. That does not seem to be the intention of those trumpeting this report.
But perhaps I’m totally mistaken about this, and a discovery of fraud involving public monies is sufficient to justify turning off the spigot to the entire sector in question. In that case, I suppose that Congress will finally get around to eliminating farm subsidies because of fraud in that sector.
I understand that this may hurt some states, like Iowa, but hey, their Senator is currently leading the charge to change the way fraud is dealt with by Congress.