Coincidence: Fed's Attack on For-Profit Colleges Supports Dem Donor's Agenda

Florida trial attorney Chris Hoyer, who along with his wife, has donated close to $30,000 to President Barack Obama and other Democratic candidates and causes over the last decade, appears to be curiously in-tune with the Democratic administration’s agenda on higher education.

Hoyer, through his James/Hoyer Law Firm, is targeting for-profit career schools for class actions at around the same time the Obama administration Department of Education appears to be targeting that same industry through aggressive new regulatory action and rule making.

Hoyer has filed a lawsuit against Westwood College, claiming the school lied about tuition costs and future salary potential for graduating students. As with any class action situation, where the people who benefit are primarily the attorneys, Hoyer’s class action pursuits should not be taken lightly. His 2008 action against Waste Management Company yielded each plaintiff a whopping $25.

But the underserved, largely black and Hispanic students who tend to enroll in similar career schools need to worry that their education choices are under legal assault. “I’m not trying to attack the whole for-profit school industry,” Hoyer maintains. Nevertheless, James/Hoyer claims on its website that it is “investigating” no fewer than seven such for-profit colleges.

As it happens, the Department of Education has begun an aggressive campaign to enforce a beefed up “Gainful Employment” rule. As former New Jersey Governor and 9/11 Commissioner Thomas Kean recently pointed out, this “Gainful Employment” rule appears to be specifically targeted at the same career schools in Chris Hoyer’s laser scope:

Specifically, the department’s proposed gainful employment rule, which seeks to regulate the amount of debt that students who attend career colleges can take on, has been met with legitimate criticism from both sides of the aisle. The rules purport to target higher education programs with high loan default rates.

However, many have expressed concern that, because of the demographics of the students inthese programs, these rules would have the most devastating effect on low-income, underserved and minority students.

So far, the department has delayed its initial decision to consider the more than 90,000 public comments it received — far greater than any rule in thedepartment’s history. Clearly, there are many interested parties and much at stake.

The department’s approach is risky and illogical. Instead of focusing on crucial U.S. higher education assets — community colleges, career colleges, traditional four-year colleges and universities — it is singling out one segment. Yet this segment — career colleges — provides access for many students who might otherwise not attend college.

Even former Clinton administration bigwig Lanny Davis has argued that the Department of Education’s Gainful Employment rule making process has been a “stacked-deck” characterized by “an anti-private sector mind-set.

To date there are no accusations of collusion between trial lawyer and Democratic Party funder Chris Hoyer and the Department of Education. But there are troubling allegations that the Department of Education may have telegraphed its rule making intentions to short seller Steven Eisman and perhaps others. Senators Richard Burr (R-N.C.) and Tom Coburn (R-Okla.) asked the Inspector General to open an investigation into alleged secret meetings between DOE officials and short sellers.

Stay tuned. There is lots of smoke swirling around the Department of Education on this one.

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