Home > Uncategorized > Deregulation: We’ve Seen This Movie Before… and It Doesn’t Have a Happy Ending

Deregulation: We’ve Seen This Movie Before… and It Doesn’t Have a Happy Ending

November 27, 2018

The Washington Post’s Laura Medlar’s recent article, “DeVos Rescuing For-Profit Education” seems like a rerun of the movies that came out after the crash of 2008, movies that described how a toxic mix of deregulation and lax oversight by auditors combined to undercut our economy.  In place of de-regulated banks, the article features three profiteering post secondary education institutions—Virginia College, Corinthian Colleges and ITT Technical Institute— and in place of Moody’s, the firm that accredited loans, we have ACICS, the Accrediting Council for Independent Colleges and Schools.

The Obama administration, who saw the ominous parallels between the student loan industry and the banking meltdown in 2008 instituted stricter accreditation guidelines that resulted in ACICS no longer being recognized as an accrediting agency and the denial of government backed loans to students attending Corinthian Colleges and ITT Technical Institute, a decision that led to the closure of those enterprises. Why? Because the USDOE under the Obama administration saw its role as protecting students from enrolling in “...poorly performing career training programs” that failed to prepare them for the employment the for-profit colleges promised and protecting taxpayers from spending billions of their funds on those same schools.

Unsurprisingly… Betsy DeVos and President Trump see things differently.  From their perspective, regulations “interfere with innovation” and prevent students from having a wide range of choices when it comes to seeking higher education. And, as Ms. Medlar reports, this is only a portion of the deregulation Ms. DeVos is implementing:

At the Education Department, DeVos has long believed the federal government should exercise as little control as possible over the nation’s schools, and she has spent a large chunk of her tenure undoing the work of her predecessors. She has revoked guidelines on affirmative action and transgender students, and is expected to cancel guidance regarding racial bias in school discipline.

Now, DeVos is poised to build a legacy of her own — creating new rules for schools and not just jettisoning regulations in place when she arrived. Her goal, aides say, is to encourage innovation by letting new players into the federal student loan program who are barred by today’s regulations, and eliminating or modifying requirements that no longer make sense.

I suppose protecting the taxpayers’ commitment to pay off loans to fly-by-night for profit education enterprises that do not have to meet regulations is an example of a “requirement that no longer makes sense“… and, similarly, guidelines that avoid racial bias and protect the rights of transgender student must also fall under that rubric. Here’s hoping, as noted in an earlier post, that the Democratic controlled House enacts legislation that undercuts these efforts to protect minorities, students, and taxpayers.

 

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