Watchdog Claims Conspiracy Driving Rules On For-Profit Colleges

A Washington advocacy group is claiming that Wall Street investors have conspired with the Department of Education to craft rules that would damage for-profit colleges to drive down their stock prices and allow short-sellers to profit. The a…

A Washington advocacy group is claiming that Wall Street investors have conspired with the Department of Education to craft rules that would damage for-profit colleges to drive down their stock prices and allow short-sellers to profit.

The as-yet unsubstantiated conspiracy theory — advanced in a press release Wednesday — underscores the intensity of the campaign by for-profit colleges to derail proposed federal rules that could tighten their access to federal aid dollars. The new rules come in response to a growing body of evidence that for-profit colleges such as the University of Phoenix and Kaplan University have left graduates suffering under debts they cannot repay given the meager wages they typically earn.

In the press release, the self-described watchdog, Citizens for Responsibility and Ethics in Washington (CREW), portrays the rule-making as little more than a ploy aimed at driving down stock prices of the publicly-traded companies that operate for-profit colleges so that savvy short sellers can cash in.

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