(Fort Wayne) News-Sentinel
Privately owned, for-profit colleges just got a powerful message: toe the federal government line, play by its rules, or you will be destroyed.
The federal government sent that message by actually killing one of those colleges — ITT Technical Institute — destroying 8,000 jobs and stranding 40,000 students in the process, including the ones at Fort Wayne’s campus.
Technically, ITT put itself out of business, but it is fair to say the government issued a regulatory death warrant. Last month the Department of Education barred new enrollees from tapping federal aid, delayed loan reimbursements and increased the collateral the school was required to have by $153 million. ITT had only $78 million on hand at the end of June and so had no way of meeting the administration’s demand.
Ironically, the point of collateral is to protect students and taxpayers from harm should the school collapse. But bumping the figure so high guaranteed that the school would collapse, and sooner rather than later. The school announced this week, right on cue, that it had no choice but to immediately close all 130-some campuses across the U.S.
Call the federal government’s action arbitrary and capricious, and you would be right, and you can throw in “vindictive” as well.
There are legitimate discussions to have about the school’s recruiting tactics, academic rigor and graduation rates, but similar concerns could be raised about a lot of schools, and there are less drastic ways of dealing with them.
(Or a school could just avoid the scrutiny. Laureate International Universities, similar in mission and approach to ITT and with similar concerns about it, paid Bill Clinton $17.6 million to be its “honorary chancellor.” That school is doing just fine, thank you very much.)
Thanks to the government’s heavy-handedness, 40,000 students face an uncertain future. Some won’t be able to get their academic credits recognized elsewhere. Some will have high debts with nothing to show for them.
And there will be less competition in higher education. Students trying to build their futures will have one less choice.
The lesson to be learned here is an old one — the Golden Rule: He who has the gold makes the rules. Government money comes with government strings. That’s why Hillsdale College is able to stay one of the best small schools in the country. It takes no money from Washington, and therefore no nonsense, either.
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