Many top for-profit college industry owners supported Donald Trump’s bid to return to the White House. They had benefitted when, during Trump’s first term, his education secretary, Betsy DeVos, largely ended federal regulatory and enforcement efforts to hold for-profit schools accountable for deceiving students and ripping off taxpayers. But some industry barons, having contributed to the Trump 2024 campaign, now may be scared by efforts of the new Trump administration, including Elon Musk’s DOGE team, to disrupt operations of the U.S. Department of Education. Both
Trump and his new Secretary of Education
Linda McMahon publicly suggested last week that the Department will be
abolished.
Although the for-profit college industry endlessly complained that the Biden and Obama education departments were unfairly targeting the industry with regulations and enforcement actions, they now seem concerned about the possibility that the Trump administration will shutter the Department entirely, abandon the federal role in higher education oversight, and leave regulation to the states. They likely are even more frightened that the proposed gutting of the Department will interfere with the flow of billions in federal taxpayer dollars to their schools.
The Chronicle of Higher Education
reports that Jason Altmire, the former congressman who is now the CEO of the largest lobbying group of for-profit colleges, Career Education Colleges and Universities (CECU), says that his schools are worried about the potential disruption of funding for federal student grants and loans.
Altmire apparently also expressed concern that turning regulation over to the states could create problems for online schools that operate in multiple states, especially because some states have relatively strong accountability rules.
Many for-profit colleges receive most of their revenue — as much as the 90 percent maximum allowed by U.S. law — from federal taxpayer-supported student grants and loans. For-profit schools have received literally hundreds of billions in these taxpayer dollars over the past two decades, as much as
$32 billion at the industry’s peak around 2010, and around $20 billion annually n0w.
But many for-profit schools have used deceptive advertising and recruiting to sell high-priced low quality college and career training programs that leave many students worse off than when they started, deep in debt and without the career advancement they sought. Dozens of for-profit schools have faced federal and state
law enforcement actions over their abuses.
CECU (previously called APSCU and before that CCA) has
included in its membership over the years many of the most abusive, deceptive school operations, including Corinthian Colleges, ITT Tech, Education Management Corp., Perdoceo, Center for Excellence in Higher Education, DeVry, Kaplan (now called Purdue University Global), and Ashford University (now called University of Arizona Global Campus). (Republic Report highlighted the bad actors on CECU’s membership list for many years; CECU removed the list from its website about four years ago.)
Florida couple Arthur and Belinda Keiser are among those who have benefited the most from CECU lobbying and taxpayer funding. The Keisers run for-profit Southeastern College and non-profit Keiser University, which collectively have received hundreds of million in federal education dollars over the years. They also are among the most
politically active owners in the career college industry.
While Belinda Keiser has run, unsuccessfully, for the state legislature,
Arthur Keiser has been one of the most aggressive lobbyists for the career college industry in Washington. He has been a dominant figure on the board of CECU, and he hired expensive lawyers to go all the way to the U.S. Supreme Court in a failed effort to block a
settlement that provides debt relief to students who attended deceptive colleges, including Keiser University. During Trump’s first term, Arthur Keiser chaired NACIQI, the Department of Education’s advisory committee reviewing the performance of college accreditors.
The Keisers created controversy and were eventually penalized by the IRS for a shady 2011 conversion of Keiser University from for-profit to non-profit, in a deal that allowed the couple to continue making big money off the school. Keiser University has also settled cases with the Justice Department and the Florida attorney general over deceptive practices.
In the two years leading up to the November 2024 election, according to Federal Election Committee records, Belinda Keiser donated more than $250,000 to various Republican candidates and political committees, including $35,000 to the Trump 47 Committee, $10,300 to the Trump-affiliated Save America PAC, $3300 to the Trump Save America Joint Fundraising Committee, and $33,400 to the Republican National Committee.
Ultra-wealthy college owner
Carl Barney was another big Trump 2024 donor. Barney operated the Center for Excellence in Higher Education,
another troubling conversion from for-profit to non-profit that kept taxpayer money flowing into his bank accounts, for schools including CollegeAmerica and Independence University. Barney’s schools lost their accreditation, and then their federal aid, after the Colorado attorney general in 2020 won a lawsuit accusing CollegeAmerica of deceptive practices. (The case is still pending after an appeal.)
Amid a torrent of donations to Republican committees last fall totaling over $1.6 million, Barney donated $924,600 to the Trump 47 Committee, $74,500 to the Trump-supporting Make America Great Again PAC, and $247,800 to the Republican National Committee, according to federal records.
In a September
post on his personal website, Barney explained that he liked that Trump “wants to work with Elon Musk to reduce spending, regulations, waste, and fraud in the federal government.”
What exactly waste, fraud, and abuse seems to mean in the context of the Trump/Musk effort is troubling. There is little evidence that what DOGE has found and shut down relates to actual fraud, abuse, or corruption.
Instead it appears that much of what Musk and DOGE have focused on is weakening or eliminating either (1) federal agencies that have been
investigating Musk businesses, or businesses of other top Trump donors; or (2) agencies that work on priorities — such as equal opportunity for Americans or
alleviation of poverty or disease overseas — that
Trump or Musk dislike.
And the Trump team has been
firing, across multiple federal agencies, the inspectors general, ethics watchdogs, and other top officials actually charged with rooting out waste, fraud, and abuse — further undermining the claim that the Trump team is trying to bring about more honest and efficient government.
It’s doubtful that even the heaviest sledgehammer DOGE attack would eliminate the federal student grants and loans that Congress has mandated to give low and moderate income Americans of all backgrounds a better chance to improve their lives through higher education. Assuming such financial aid will continue, then if Trump, Musk, and DOGE truly wanted to root out waste, fraud, and abuse, and save big money for taxpayers, one thing they could do is strengthen, rather than abolish, the Department of Education — not to keep the money flowing to all for-profit colleges, as CECU seems to want, but to advance efforts to ensure that taxpayer dollars go only to those colleges that are creating real benefits for students and for our economy.
That would mean enforcing and building on, not destroying, the Department of Education rules put in place by the Biden administration, including: the gainful employment rule, which creates performance standards to cut off aid to for-profit and career programs that consistently leave graduates with insurmountable debt; the borrower defense rule, which cancels the debts of students scammed by their schools and empowers the Department to go after those predatory schools to recoup the taxpayer money; and the
90-10 rule, which helps keep low-quality programs out of the federal aid program and reduces the risk that poor quality schools will target U.S. veterans and service members.
It would also mean continuing the Biden administration’s efforts to more aggressively evaluate the performance of the private college accrediting agencies that oversee colleges and serve as gatekeepers for federal student grants and loans.
Fighting waste, fraud, and abuse would also mean strengthening, not gutting, efforts to investigate and fight predatory college abuses by enforcement teams at the Department of Education, Federal Trade Commission, Consumer Financial Protection Bureau, Justice Department, Department of Veterans Affairs, and Department of Defense. Many deceptive school operations remain in business today, recruiting veterans, single parents, and others into low-quality, over-priced college programs; they include Perdoceo’s American Intercontinental and Colorado Technical University, Purdue University Global, University of Arizona Global Campus, DeVry University, Walden University, the University of Phoenix, South University, Ultimate Medical Academy, and UEI College.
Fighting waste, fraud, and abuse also would likely require a different higher ed leader at the Department than
Nicholas Kent, the Virginia state official whom Trump has nominated to serve as Under Secretary of Education. Kent previously worked at CECU as a lobbyist advancing the interests of for-profit schools. Prior to that, he worked at Education Affiliates, a for-profit college operation that faced
civil and criminal investigation and actions by the Justice Department for deceptive practices.
Diane Auer Jones, who held the same job in the first Trump administration, had a career background similar to Kent’s, and she twisted Department policies and actions to benefit predatory colleges. That is presumably the world CECU and its for-profit college barons want to restore: All the money, none of the accountability rules.
In the end, the predatory college owners may get what they want. Given the brazen self-dealing, and fealty to corporate donors, of the Trump-Musk administration, and the
sharp elbows of paid-for congressional backers of the for-profit college industry like Rep.
Virginia Foxx (R-NC), we will probably end up with the worst of all outcomes: the destruction of the Department of Education but a continued flow of taxpayer billions to for-profit schools, without meaningful accountability measures to ensure that everyday Americans are actually protected from waste, fraud, and abuse.
Americans should demand from Trump and Secretary McMahon a different course — one that provides educational opportunity for all and strengthens the U.S. economy by investing in higher education, while removing from the federal aid program the abusive colleges that rip off students and scam taxpayers.
