The regulatory failure
The NYT’s Gretchen Morgenson with more on the regulatory failure – and the costs we taxpayers will bear – in the for-profit ed arena:
In the years before the mortgage crisis, financial regulators often looked the other way as banks and other lenders pursued reckless activities that cost investors, taxpayers and borrowers billions of dollars. When trouble hit, these regulators had to scramble to fix the mess that their inertia had helped create.
This same dismal pattern is now playing out in the for-profit education arena.
For years, federal and state regulators have done little as dubious operators of for-profit colleges and trade schools have pocketed tuitions funded by taxpayer-backed loans. Many students left these colleges with questionable educations and onerous debt loads that cannot be erased in bankruptcy.
Regulators have finally woken up to this ugly reality. And, once again, taxpayers and borrowers will pay the price of regulatory failures.http://www.nytimes.com/2014/07/13/business/flunking-out-at-a-price.html