Ties That Bind?

Hillary Clinton pledges to outdo the Obama administration in cracking down on for-profits. But will her ties to the industry, including the $16.5 million Bill Clinton earned working for Laureate Education, influence her approach?

April 18, 2016
Laureate Education
Laureate CEO Doug Becker with former U.S. President Bill Clinton

On the campaign trail, Hillary Clinton has pledged to crack down on for-profit colleges, saying she would go further than the Obama administration’s high-profile efforts to rein in problems in the industry over the past seven years.

But the Democratic front-runner also has an array of connections to the for-profit education industry that some observers have said raise questions about the type of influence for-profit colleges would enjoy under a Clinton administration.

Most prominent are Clinton’s ties to the global for-profit education behemoth Laureate Education, for whom her husband, Bill Clinton, worked directly, earning $16.5 million between 2010 and 2014. The former president stepped down from his post as honorary chancellor for Laureate International Universities last year, after making a handful of trips to various countries on behalf of the company.

In some cases, according to several news reports, Laureate’s global outposts spend heavily on marketing and pay student recruiters based on the number of students they enroll, a tactic that is restricted by federal law in the United States. The Obama administration tightened those rules, known as incentive compensation regulations, and it also reversed a Bush administration directive that effectively capped the penalties that colleges could face when they violate the rules.

In Chile, for example, one of the company's campuses was criticized by its accreditor over academic quality issues and also ran into trouble with government regulators.

Laureate International Universities continues to have a partnership with the Clinton Global Initiative, part of the Bill, Hillary & Chelsea Clinton Foundation. Laureate also did business with a consulting firm, Teneo Holdings, that was started by and employed an array of Clinton associates, Politico reported last week.

Hillary Clinton herself gave a speech in 2014 for which she was paid $225,000 by Academic Partnerships, a for-profit education company that works with traditional colleges to help them create online degree programs, according to her personal financial disclosures.

And separately, several campaign bundlers who have raised money for Clinton’s current run have worked as lobbyists for the Apollo Group, the parent company of the University of Phoenix.

Republicans, who have been far more supportive of the for-profit education industry, have criticized Hillary Clinton’s position on for-profit colleges as hypocritical given her ties to Laureate. But even some critics of for-profit colleges say they have concerns about the type of influence for-profit education companies may have in a Clinton White House, though few were willing to say so on the record.

On the campaign trail, Clinton rhetorically has been sounding all the right notes for critics of for-profit colleges. Her higher education platform says she would “strengthen” the Obama administration’s new regulations aimed at cracking down on for-profit colleges and expand support for federal agencies that pursue “law-breaking for-profits.” And her platform calls for bringing “integrity to online learning,” which is a delivery form of higher education that many for-profit companies use, as do nonprofits.

Clinton directly criticized for-profit colleges in one of her first campaign events last year. And both she and rival Bernie Sanders have called for billions of dollars in new federal spending on public colleges and universities, including community colleges, which often compete directly with for-profit institutions.

To be sure, the Obama administration, which for-profit colleges have described as being at war with their institutions, has had its own slew of ties to the industry. For-profit-college lobbyists who had connections to powerful Democrats and the Obama White House are widely credited with watering down the administration’s first proposed set of regulations on the industry in 2010 and 2011, which ultimately were largely struck down by a federal court.

And several former Obama administration officials became involved in for-profit education ventures after leaving government work.

Yet the White House, cheered along by liberal Senate Democrats, in the past several years has become increasingly strident in its criticism of and tangles with the for-profit-college industry.

A remaining question, several observers said, is whether a second Clinton White House would continue the Obama administration's aggressive posture, and the extent to which for-profit colleges would have a seat at the table in a way they’ve largely been denied for much of -- and certainly the second half of -- the Obama administration.

For example, in one instance that might give for-profit college critics pause, as secretary of state, Clinton pushed for the inclusion of Laureate at a higher education policy dinner that was hosted at the State Department.

She wrote in a 2009 email to a top aide that Laureate was “a for-profit model that should be represented” at the closed-door event, which also included the leaders of several research universities as well as a community college. Describing Laureate as “the fastest-growing college network in the world,” Clinton said the company was “started by Doug Becker, who Bill likes a lot.”

A senior vice president at Laureate was subsequently added to the guest list of the dinner, according to Clinton’s emails, which were released by the State Department last year under a court order. The dinner was several months before Bill Clinton joined the payroll of Laureate.

David Halperin, an attorney and outspoken critic of for-profit colleges who tracks the industry, on his blog on The Huffington Post, has praised Clinton for taking a "strong, principled stand against predatory for-profit college companies."

Still, he wrote recently, that he hopes "she will keep listening to students who have been deceived, and not to people, even well-connected campaign supporters, whose work helps shield and enrich such bad actors."


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