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Saturday, October 23, 2010

Why is the Department of Education picking on for-profit colleges?

“Education Secretary Arne Duncan will step up oversight of federal student financial-aid programs after an undercover government investigation found deceptive marketing practices at 15 for-profit colleges.”

Why is the government only prosecuting for-profit colleges? The answer is that 1) they dislike the notion of free-enterprise rather than state-managed business and 2) non-profit and public colleges and universities have far too much political clout to attack. This is a classic case of selective prosecution for political reasons.

Let's take a hard look at all colleges and the promises they are making about the job prospects for their graduates.

The answers to college loan abuse are simple: 1) Make all colleges and universities private or non-profit and get the government out of this business. 2) Remove all government involvement in student loans and student loan guarantees. 3) Make college loans discharable in bankruptcy just like most other consumer loans. This by the way will make them more expensive witthout all of the subsidies

Let’s turn the college loan business over to the private sector and the colleges and universities that are in the education business. We would end up with far less expensive colleges and college educations that were also more responsive to the job market. Colleges would produce more grads with specialized technical training and far fewer English majors. Loans would be harder to get and a fundamental question would be the graduate’s ability to pay back the loan with the education promised.

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