Scrutiny Grows of Education Dept. Rule Making on For-Profit Colleges

April 29, 2011

Exactly what it will amount to and whether it will prompt the U.S. Education Department to temper its plan to toughen regulation of for-profit colleges is unclear. But as published reports document that critics of the department's approach have ramped up their spending on lobbying against new rules, evidence is emerging that the lobbying appears to be having an impact. Dow Jones Newswire and Bloomberg, among others, cited unnamed sources in reporting Thursday that the department's inspector general was investigating aspects of the relationship between the agency's officials and Wall Street investors who benefit when for-profit colleges' stock falls. Egged on by advocacy groups' assertions that the investors improperly influenced the department's regulatory process, two Republican U.S. senators urged the inspector general to investigate the department's ties to the short sellers, A spokeswoman for the inspector general said Thursday that the office does not confirm the existence or status of investigations. But it is uncommon for federal agencies' inspectors general to ignore requests from members of Congress, so even if an investigation is indeed under way, gauging its seriousness is difficult. Also on Thursday, Sen. Michael B. Enzi, the senior Republican on the Senate's education committee, sent a letter asking Education Secretary Arne Duncan for documents related to the negotiated rule making session that produced the new rules on for-profit colleges.

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