Fraud and Waste

Candidates for office are notorious for promising to cut taxes and claiming that they will pay for them by reducing “fraud and waste.” Usually, this is bullshit; especially at the local level. Americans love to believe bloat exists in service delivery, but usually, the only way to pay for tax cuts is by eliminating services.

That said, a recent Congressional report has identified one way to save the federal government money by curtailing an activity that is actively harmful: funding tuition at for-profit schools of “higher education.” (Note quotes here.)

The Committee that issued the report was headed by Senator Tom Harkin. It hasn’t gotten the attention it deserves. The report documents aggressive recruiting, exorbitant tuition, abysmal student outcomes, regulatory evasion, and taxpayer dollars pocketed as profit.

According to the summary of findings published by the New York Times, students at for-profit colleges are charged, on average, four times as much tuition as students at public universities, and eighty percent of that comes from American taxpayers. Furthermore, according to the blog Political Animal, “these colleges do an exceptionally crappy job of educating students.”

Retention rates are horrendous: the majority of enrollees, according to the Times, leave without a degree, but even those who earn a credential usually discover it isn’t worth the paper it’s printed on. And–perhaps the most telling statistic from a taxpayer’s point of view– students at for-profit colleges make up 13% of the country’s college students, but account for 47% of defaults on student loans.

Think about that next time you see one of those gauzy–and expensive–commercials for a college you never heard of.

The Obama Administration has tried to change the student loan system so that tax dollars cannot be used at most of these schools, but the effort–like so many others–has been met with fierce lobbying and obstruction. You might think that all of those politicians running for office on a platform of reducing fraud and waste would applaud this recommendation. After all, refusing to fund con artists would actually protect those who are currently getting ripped off, as well as saving tax dollars.

You’d think this would be a no-brainer, one of those rare “win-win” situations. But you’d be wrong.

And we wonder why Congress has a 17% approval rating. (Maybe the 17% attended for-profit colleges.)