Three former Obama administration insiders are working behind the scenes to get the Education Department to approve a private buy of the controversial University of Phoenix college system—even as President Barack Obama pledges to rein in for-profit education.
The investors include a private equity firm founded and run by longtime Obama friend Marty Nesbitt and former Deputy Education Secretary Tony Miller. The firm, Chicago-based Vistria Group, has mounted a charm offensive on Capitol Hill to talk up the proposed sale of the troubled for-profit education giant, which receives more than $2 billion a year in taxpayer money but is under investigation by three state attorneys general and the FTC.
Other key players in the deal are also either one-time White House insiders or close to the president himself, such as Jonathan Samuels, "who was responsible for pushing Obama's agenda through Congress during his nearly six years working in legislative affairs at the White House," Politico's Michael Stratford and Kimberly Hefling report. The insiders are now asking the Education Department to allow the purchase of the University of Phoenix for $1.1 billion.
Miller himself "was part of the effort to more tightly regulate for-profit colleges at the very agency now charged with approving the ownership change," Stratford and Hefling write.
Mark Schneider, a former education official under then-President George W. Bush, told Politico, "There is at least a taste of unseemliness involved in this."
"They regulate it. They drive the price down.... They are buying it for pennies on the dollar," he said.
The investors are claiming that they will use the acquisition to reform the failing education company and run it in "a manner consistent with the highest ethical standards."
But the deal's critics question that claim.
Rep. Virginia Foxx (R-N.C.), who leads the higher education subcommittee of the Committee on Education and the Workforce in the U.S. House of Representatives, said, "It's ironic that a former senior official at the Department of Education—an agency that has intentionally targeted and sought to dismantle the for-profit college industry—would now take the reins at the country's largest for-profit college."
The University of Phoenix approved the buy in February. The White House's so-called "crackdown" on for-profit colleges, announced in 2014, officially rolled out in July 2015.