Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

How For-Profit Schools Got Liberal Activists To Carry Their Water


Mike Elk has just pointed out that the liberal activists who have been fighting against the critics of for-profit schools are basically bought and paid-for stooges.

Former Clinton administration White House counsel Lanny Davis penned an op-ed arguing that "the notion of pervasive, systemic abuse and fraud as suggested by [FrontPoint fund manager Steve] Eisman, more with innuendo than hard facts, may not stand up to scrutiny."

He complained vigorously that Eisman's testimony to a Senate panel on for-profit schools should be discounted because Eisman is shorting the sector. Davis never bothered to mention that he is working as a lobbyist for the Coalition for Education Success, a trade association of for-profit colleges.

Tom Matzzie, the former head of's Washington operations, also penned an attack on Eisman, comparing him to an arsonist. Matzzie argued that Eisman shouldn't have been allowed to testify because he stands to profit from decline in the values of publicly-traded for-profit schools.

Elk points out that Matzzie is the vice president of the lobbying firm LawMedia Group, whose clients include the for-profit funded Student Choice Coalition. "Matzzie also runs an organization called Accountable America, which he says accepted funding from John Sperling, the Chairman of the Apollo Group, which owns the University of Phoenix. Matzzie did not disclose these conflicts of interest when he denounced Eisman for testifying against for-profit schools' predatory loans," Elk writes.

A quick word to clear up some confusion about for-profit schools. The terminology makes it sound as if these are free-market enterprises. They aren't, for the most part.

Here's Elk again:

Students enrolled in for-profit schools represent just 10 percent of all post-secondary students in the United States but account for 44 percent of all student-loan defaults. The industry has grown substantially in the past decade, as federal financial aid to for-profit school students ballooned from $4.6 billion a year in 2001 to $26.5 billion a year in 2009, according to analysis done by the Chronicle of Higher Education. Federal dollars totaled 87 percent of revenue at 14 for-profit schools in 2009, including the largest, University of Phoenix. These schools are often unaccredited and, in the words of Secretary of Education Arne Duncan, "are saddling students with debt they cannot afford in exchange for degrees and certificates they cannot use."

Hat tip Felix Salmon.

Companies mentioned in this post


Questions? Comments? Email us at

Follow John on Twitter @

Follow NetNet on Twitter @

Facebook us @