The Department of Education has been investigating the for profit college industry, including The University of Phoenix and Kaplan. Government support for student loans is the backbone of the higher education industry, including non-profits. Without access to low cost student loans most colleges would be out of business. There is some evidence that the for-profit colleges have been over-selling the benefits of higher education to students who are left with lots of debt but limited access to jobs that enable them to pay off their debt. Many view this as an example of predatory lending that is much like what we saw in the sub-prime mortgage market. This view has been publicized by Steve Eisman who shorted the sub-prime market and made a fortune. He achieved fame after the publication of Michael Lewis's book "The Big Short". An advocacy group, has come to the defense of the for-profit college industry by arguing that short sellers, like Eisman, are attempting to discredit the for-profit colleges and drive down the value of their stocks. This if very much like the claim that Lehman Brothers and Bear Sterns made when they were failing. They argued that they were in good shape financially but that short-sellers were causing them to face liquidity problems.
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