This new rule is merely the latest front in what has become a White House war to kill for-profit private education. Apparently private schools that, unlike Harvard or Columbia, pay taxes and offer a non-elite education to regular folks offend their liberal sensibilities. Three years ago, a previous draft of the rule was struck down by a federal judge, who called one of the tests arbitrary. The new income and loan thresholds look arbitrary too.
The Administration says students at for-profits make up 13% of the higher education population but account for 31% of loans and nearly half of loan defaults. It fails to point out that for-profits serve a larger share of older, poorer and working people, who can’t draw on family support and disproportionately rely on loans to pay for college.
They shouldn’t be compared to graduates of Mr. Obama’s Ivy League alma maters, but to schools that serve similar students such as community colleges. About 15% of borrowers at community colleges defaulted within two years after starting to pay off a federal student loan, compared with 13.6% at for-profits. There are plenty of bad schools, both for- and nonprofit. But students and parents aren’t dumb. If Phoenix graduates didn’t get good jobs, its campuses would empty out fast.