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Jeb and For-Profit Higher Education

Blogging Our Great Divide
June 25, 2015

by Ben St. Clair

Jeb Bush’s troubling connections to for-profit colleges shine light on his priorities.

Former Florida governor Jeb Bush’s choice of Miami Dade College for his presidential campaign announcement suggests that addressing higher education rests high on his policy priorities. Without discussing policy specifics, Bush championed himself as an education reformer but failed to mention that his brand of reform does not involve public schools like Miami Dade.

Instead, Bush has fully aligned himself with the for-profit college industry — an industry that receives 90 percent of its revenue from taxpayers while earning over $4.5 billion in profits. For-profits provide lower quality education, at significantly higher costs, than non-profit institutions.

Although for-profits enroll just 10 percent of college students, they accounted for 25 percent of total government aid and 47 percent of all federal student loan defaults in 2010. The combined graduation rate at all four year for-profit institutions was nearly half that of their non-profit counterparts, according to a 2012 Department of Education report. Since over 95 percent of the students at for-profit institutions take out some form of student loan, low graduation rates and high levels of debt can prove deadly for students striving to get ahead.

To understand Bush’s connection to the for-profit industry, look no further than former Minnesota congressman Vin Weber, a close advisor to Bush’s campaign.

Since 1994, Weber has served on the board of ITT Education Services, one of the country’s largest, and most egregious, for-profit companies. At the same time, Weber lobbied his former colleagues on Capitol Hill on behalf of for-profit companies Capella Education and American Public University System. Weber held contracts with the two companies, signed either individually or with a team of lobbyists, totaling over $1.3 million dollars since 2010, including $90,000 in the first quarter of 2015 when Bush tapped him as an advisor.

Last month, the Securities and Exchange Commission filed suit against Weber’s employer ITT, alleging that the company defrauded investors “by concealing the extraordinary failure of two off-balance sheet student loan programs, and the looming effect of that failure on ITT’s financial condition.” The lawsuit comes in addition to 2014 suits by both the Consumer Financial Protection Bureau, over the company’s predatory lending practices, and the New Mexico attorney general, over the company’s deceptive marketing strategies.

Bush has also been more directly involved with the for-profit college industry. In addition to opposing much-needed regulations proposed by the Obama Administration, he recently resigned as a senior advisor and shareholder to the for-profit higher education company Academic Partnerships. The firm specializes in converting public university classes into online courses while controlling course administration and reaping steep profits. Despite criticism that they’ve converted schools into “diploma mills,” the company reports annual sales of $100 million, with Bush earning a reported $60,000 a year for his role.

Bush’s direct stake in the for-profit industry reflects a troublesome relationship – one that calls into question Bush’s strategy to address what he has referred to as “the growing affordability problem” in higher education. A community college may have served as a promising backdrop to Bush’s inaugural campaign speech, but his ties to the for-profit industry are a troubling sign of both his education priorities and his solutions to the many issues plaguing higher education.

Ben is an intern with the Project on Opportunity and Taxation at the Institute for Policy Studies and a junior at Fordham University.

Topics
Student Debt,
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