The Presidential Election May Decide the Future of For-Profit Colleges
Credit: Michael Le Brecht / Contributor / Disney General Entertainment Content / Getty Images- President Joe Biden has aggressively pursued oversight of for-profit colleges while in office.
- The future of his regulations may be dependent on who wins November’s election.
- Republican candidate Donald Trump was considered to be friendly to the for-profit industry during his presidency.
- Democratic candidate Kamala Harris, meanwhile, has prosecuted for-profit operators while serving as California attorney general.
The future of the multibillion-dollar for-profit college industry may change drastically depending on this November’s election outcome.
The 2024 presidential election, which pits former President Donald Trump against Vice President Kamala Harris, could bring the industry into the limelight.
Even if oversight of the for-profit industry isn’t featured on the debate stage, the outcome of the election is sure to have major implications on how the industry will be able to function moving forward.
President Joe Biden has dialed in on for-profit colleges during his presidency.
His administration has tightened straps on oversight policies, including:
- Reinstating gainful employment parameters
- Broadening borrower defense to repayment categories
- Closing the 90/10 loophole requiring for-profits to receive at least 10% of income from nonfederal sources
These issues aren’t making headlines in the lead-up to Election Day. Nevertheless, with over 800,000 enrolled in U.S. for-profit colleges and universities, it’s an issue worth monitoring.
Trump Poised to Reinstate Previous Policies Favoring For-Profits
Trump proved to be an ally to the for-profit college industry during his presidency.
Wesley Whistle, project director of the higher education initiative at New America, told BestColleges that he anticipates for-profit leaders would be happy to see Trump win reelection. He took a relaxed stance on the industry, even rolling back some oversight protections.
He’s guaranteed to be more friendly,
Whistle said.
Most notably, ED reversed an Obama-era gainful employment (GE) rule during Trump’s presidency. GE sets minimum salary and maximum loan payment thresholds for graduates from for-profit institutions and certificate programs.
Biden finalized new GE rules in 2023 that are even stricter than former President Barack Obama’s regulations.
Whistle predicts that reversing Biden’s GE regulations would be among Trump’s chief higher education priorities if reelected. He also foresees Trump overturning new borrower defense to repayment rules that Biden finalized in 2023.
Borrower defense allows students to petition ED to forgive federal student loan debt if they can prove their institution misled them. Under Trump, former ED Secretary Betsy DeVos stopped processing borrower defense applications and made significant changes to the regulations, something Trump’s next ED secretary may replicate.
Biden’s borrower defense rule remains in legal limbo.
Harris’ History Foretells Further Oversight, Crackdown
Harris has spotlighted her past actions against for-profit colleges on the campaign trail.
Most notably, her office won a $1.1 billion judgment against Corinthians Colleges in 2016 when she was California’s attorney general. She name-dropped this accomplishment during the speech that launched her presidential campaign and again during her nomination acceptance speech in August.
Jason Altmire, CEO of the for-profit advocacy organization Career Education Colleges and Universities (CECU), told BestColleges he doesn’t expect Harris to slow down on this rhetoric.
It’s part of her cachet,
Altmire said.
Whistle added that there is room for Harris to push the agenda beyond Biden-era changes. For example, Harris can choose to more aggressively hold companies and executives directly accountable, like recouping funds when ED discharges student loan debt through borrower defense.
I definitely think that could be in the cards,
he said.
Moreover, Harris’ past as a prosecutor may lead her to focus resources on oversight mechanisms.
I would assume that she would ensure [program review] offices are invested in and have the resources to oversee schools and defend students,
Whistle said.
Supreme Court Decision Leaves All in Doubt
The U.S. Supreme Court’s midyear reversal of the Chevron Doctrine hangs over for-profit oversight.
Essentially, the court decision neuters the ability of federal agencies like ED to push regulatory changes without explicit direction from Congress. Because most oversight tools come through regulatory policy — including borrower defense and GE — it means courts can overturn regulatory changes made by any presidential administration.
Altmire said CECU and its members already have ongoing court cases looking to take advantage of this legal change.
We feel very good about the issues that are important to our members clearly violating the ability of the agency,
he said. With Chevron now being overturned, the department is going to have to modify its approach moving forward.
Altmire added that CECU isn’t looking to overturn the Biden-era 90/10 rule, as Congress outlined that policy. A lawsuit regarding the preamble to the 90/10 rule, however, is possible.
The Chevron overturnal won’t just impact Biden-era regulations, however.
The same standards would apply to any changes Trump makes to regulations if he is reelected. Federal courts will effectively be the final arbiter of whether regulations are thrown out or are allowed to remain.
Federal judges are appointed by the president. So, in a roundabout way, this election will also affect not only what administration gets to craft policies regulating for-profit colleges but also which judges are in place to allow or strike down these regulations.
Schools and organizations will be looking for the right judge to sue over,
Whistle said.