A July 9 Wall Street Journal article quotes Dr. Richard Vedder, Distinguished Professor Emeritus of Economics at Ohio University, about the collapse of the for-profit Corinthian Colleges Inc.
WASHINGTON—The collapse of Corinthian Colleges Inc. is raising questions about the Obama administration’s aggressive handling of one of the country’s largest for-profit education companies, which was hemorrhaging money before regulators cut off its federal funding.
The Education Department says it was unaware of the dire state of the company’s finances before it moved June 12 to restrict access to federal student-aid dollars, which made up 80% of Corinthian’s revenue. The aid freeze was designed to pressure the company to comply with an investigation into recruiting tactics, administration officials say, not to force its closure….
Some critics say the administration was overly combative and aimed to make an example of the company. “It in effect put them out of business,” said Richard Vedder, director for the Center for College Affordability and Productivity, a Washington research center that advocates free-market ideas. “The industry is just scared out of their wits by this,” he said.
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