On the heels of the documentary “Inside Job” winning an Oscar for its depth of analysis involving Wall Street fraud and misappropriations behind the recent financial crisis, come yet additional material for perhaps a sequel. The National Black Chamber of Commerce (NBCC) recently released an infographic that reveals details concerning a web of influence reportedly spun by Wall Street hedge fund managers to press for passage of Department of Education regulations that, if accepted, would hurt the lucrative for-profit education sector. Of particular concern, NBCC expects the controversial new policies advocated by the short-sellers to have drastic consequences on minority students.
The infographic depicts the various tactics short-sellers have used to reportedly attack for-profit colleges with the goal of passing “Gainful Employment” regulations. NBCC claims the regulation threatens access to education for African-American and other minority students by cutting federal aid for career colleges, thus cutting access for thousands of minority students who depend on federal aid to attend these schools. NBCC has staunchly opposed the “Gainful Employment” rule since it was proposed. The organization claims that short-sellers have used such tactics as meeting directly with Education Department officials, slamming for-profits during a Congressional hearing and hiring a private investigator to dredge up stories that the schools recruit from homeless shelters.
“With unemployment rates hovering around 16% for African-Americans, the Department of Education should be doing everything possible to get our kids in schools and off the streets not work with short-sellers to short-change our students,” said Harry Alford, president and CEO of NBCC. “We need to ensure that students have educational options to get the skills they need to be successful in the labor market. It is an outrage that the department is allowing such corruption to happen at the expense of minority students, while short-sellers profit off of their predicament.”
However, James Markowski, a New York state-based attorney with a variety of experience in the financial sector says, “Given how long the regulatory process can be, it seems odd that hedge funds would want to hold positions that long while not being certain what the final rules would be.” Markowski continues, “Nor does it seem likely that the Department of Education would treat hedge fund guys as experts in education. I take the assertion with a grain of salt. It smacks of a conspiracy theory.”
NBCC reaches 100,000 Black-owned businesses many of which rely on graduates from these schools. In August of last year, Alford submitted comments to the public docket opposing Gainful Employment, he also testified before the department urging the rule be thrown out because of the drastic effects it will have on African-American students. Last week, NBCC applauded the House of Representatives for passing an amendment to defund the regulation and urged the Senate to do the same.
Debate will continue on this issue, particularly as the topic of education becomes more and more prominent in our country.??
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