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Higher Ed's Lobbying Machine

In taking on the cost of college, President Obama is going up against one the best organized special interests in Washington: Higher education.

Think K Street and you don't tend to think of the ivory tower. But you should. Colleges and universities spend millions of dollars each year to resist transparency and accountability. Trade groups like the National Association of Independent Colleges and Universities (NAICU) ensure that the federal government is left in the dark about how schools conduct business. From how tuition is calculated, to how many students see a reasonable return on their education after they graduate, to the partnerships that are built between schools and loan companies, institutions of higher learning have, for some forty years, been keeping the public at bay.

For-profit, non-profit, and public schools alike spend millions of dollars each year to secure federal aid while refusing government oversight. The State University of New York (SUNY) system spent $1.7 million on lobbying in 2010, for example, which was more than Sunoco, the Motion Picture Association of America, and Continental Airlines. When landmark legislation is up for a vote, as with the 2008 reauthorization of the Higher Education Act (HEA), institutions quadruple their spending.

But universities, unlike many other institutions, enjoy a unique influence on policy makers that is, perhaps, more valuable than money—they are the experts. They advise politicians on complex legislation and have a strong voice in the media. They employ people in their communities, flatter powerful leaders with honorary degrees and awards, and reserve soft spots in politicians’ hearts, many of whom graduated from these institutions.

In 1968 the American Council on Education moved into One Dupont in Washington, D.C. to begin defending the autonomy of universities. The group’s establishment was an effort to ward off conservative politicians who wanted more control over student protests, which had intensified throughout the 1960s.

But universities soon started using their muscle to protect their special interests. It was after the expansion of federal grants in 1972 that higher ed institutions banded together to create NAICU to focus on the business interests of universities.

Over the next forty years, NAICU and other organizations would protect universities from the federal government, not for the purposes of intellectual sovereignty, but for the purposes of less oversight and regulation.

When Democrats authorized the Department of Education to audit schools in the 1990s for evidence of mismanagement, NAICU helped rollback the measure by arguing that it was invasive.

Since then lobbyists in Washington have protected universities from changing practices that benefit endowments but not their students.

Early decision applications, for example, attract wealthier students who have the luxury of committing immediately. Families with less money, on the other hand, must compare financial aid packages, offered later in the process, before making a choice.

Legacies, too, draw money. Families that have histories with one particular school are more inclined to give back. Harvard University, for example, puts many unqualified legacies on the Z-List, a condition of acceptance that asks students to take a year off and mature before finally enrolling.

But the tricks go further. In 2010, the Government Accountability Office studied recruitment practices at for-profit schools by sending investigators, who pretended to be prospective students, to fifteen universities.

The extensive fraud, which prompted a hearing in front of the Health, Education, Labor and Pensions Committee on August 4th of that year, spanned from obscuring true costs of attendance, to lying about accreditation, to urging students to take out loans even when they had enough savings, to skewing the figures on compensation after graduation.

The lack of regulation has allowed many universities who abuse federal aid to fleece students out of money, waste energy recruiting the rich over the qualified, and chose lavish executive compensation over the expansion of scholarship programs.

Say SUNY had used the $6 million it spent lobbying against the reauthorization of HEA in 2008. It could have paid full tuition for almost 600 low-income New York state residents.