May 4, 2011 12:03PM

Hazy‐​Eyed Hunter Prepares to Fire on For‐​Profits

Yesterday, the U.S. Department of Education sent proposed — and highly controversial — “gainful employment” regulations to the Office of Management and Budget for review, the first step in the process of officially publishing them. The regulations — assuming they haven’t changed drastically from previous proposed versions — would limit the ability of students in vocational postsecondary programs to access federal financial aid if those programs produce debt burdens the regs deem too high, or salaries they deem too low. The exact details on what constitutes “too high” and “too low” should be revealed soon.

The big problem with this is that it is aimed at easily abused for‐​profit schools while leaving the rest of waste‐​drenched higher education untouched. But another problem, the very real risk of bureaucratic bungling, also looms large. Indeed, a story out just today from California notes that the state greatly overestimated how much it would save by cutting Cal Grant eligibility for students at schools that showed up on a recent U.S. Department of Education list of institutions with high three‐​year loan default rates. The problem: The Education Department had accidentally calculated three‐​year‐​and‐three‐​month rates, significantly overstating defaults. In fairness to the Department, it did say the list was unofficial, so California officials also bear a lot of the blame; but it sure doesn’t bode well that the Department would publish something so flawed.

There is a much more effective, and less dangerous, way to hold schools accountable than to have the federal government set blanket, hyper‐​politicized rules and try to enforce them. It is to have customers consume higher education using their own money rather than having Washington send tens‐​of‐​billions of inflation‐​fueling, extravagance‐​enabling dollars to students and schools every year. The problem is, that would just make it too hard to buy votes by falsely promising great education for all.