Government quietly corrects misleading report on for-profit schools

Derek Hunter Contributor
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Accusations always get more attention than the end result; it’s just the way the world works. Unfortunate as it may be, accusations garner bold headlines and long stories in newspapers, while corrections get a tiny blurb buried in the pages of the A section with the proverbial “we regret the error.” But when the error is made by the government, a correction is rarely forthcoming. Government corrections are released without notice or fanfare. They just appear one day, while the accusation lives on in the media and on the Internet. Never let a good charge go to waste, even when it’s proven to be wrong. Such is the case with the recent attacks by liberal members of Congress, bloggers and the media on for-profit education.

The war on for-profit educational institutions has been raging for most of this year. Based on anecdotes and innuendo, they rose to the level of Congressional hearings, front-page stories and proposed regulation all under the guise of their underhanded tactics to mislead students and rip off the government, based, in part, on a Government Accounting Office (GAO) report that purported to document their abuses.

Senator Tom Harkin (D-IA) held a public hearing on these “abuses” that featured an expert witness with no expertise in the area. Steven Eisman testified about the dangers of for-profit educational institutions even though his background was as a Wall Street insider with a history of short-selling. He stood to profit if what he was advocating — the cutting off of financial aid to students who freely chose to attend for-profit schools — was done, but he was greeted by Senator Harkin as an altruistic expert whose only concern was what is best for students.

The media played along and reported the allegations as if they’d come from a burning bush carved on stone tablets.

The outgoing Attorney General of Florida, Republican Bill McCollum, launched an investigation into the allegations for “…possible misrepresentations about financial aid, deceptive recruiting tactics, and other practices…”

Then, on November 30th, the GAO released a modified version of its report on the “abuses” of for-profit education institutions, without any fanfare, that was significantly different from the version it had released earlier in the year.

Neal McCluskey of the Cato Institute points out some of the important and significant differences between the original report and the modified version available now. He writes :

Another section went from only reporting that a representative told an applicant that the school has graduates making $120,000 to $130,000 in a job that, according to the GAO, typically makes less than $70,000 a year, to reporting that the representative also informed the applicant that she “could expect a job with a likely starting salary of $13-$14 per hour or $15 if the applicant was lucky.” $15 an hour translates into about $30,000 a year, and completely changes the tenor of the vignette.

The report essentially changed from students being promised the moon to them being offered a hunk of green cheese with the promise of potential in the future, the same promise made to students at every institute of higher learning, for-profit or not. That’s a significant change, and a change that has gone unnoticed, unremarked upon and ignored by those who used the original version as a rallying cry to take up pitchforks and torches. It’s the correction on page A23, below the fold in size 9 font.

After being acquitted of larceny and fraud charges in 1987, former Secretary of Labor Ray Donovan famously asked, “Which office do I go to get my reputation back?” Which office do for-profit education institutions go to get the students deterred from attending them by this “witch hunt” and the original, incorrect (and I’m being generous by using that word) version back?

There isn’t one. There’s only a public record of attacks based upon a report that was so flawed that its most sensational charges had to be rewritten.

The charges get the headlines, the facts get the shaft, and you can bet dollars to donuts that the war on for-profit education will continue because this has been as much about the word “profit” as anything else.

Derek Hunter is a Washington based writer and consultant. He can be stalked on Twitter @derekahunter