The federal government is misusing its authority to target private-sector education providers

The Wall Street Journal recently highlighted the federal agencies targeting Elon Musk and his companies, hindering the progress of SpaceX’s Starship. The Biden administration is employing similar tactics to impede innovation in higher education, particularly targeting student loan servicer MOHELA.

The Department of Education (DOE) is taking over management of loan programs from servicers like MOHELA, potentially paving the way for more loan forgiveness. However, the DOE’s mismanagement has already led to enrollment declines and financial aid application drops in states like California.

This pattern of government targeting private-sector opponents dates back to the Obama administration, with for-profit colleges and online program management companies facing regulatory scrutiny and closures. The threat of regulation has caused OPM stocks to plummet, prompting pushback from companies and calls for protection from financial fallout.

Some for-profit enterprises are abandoning profit-seeking to avoid regulatory challenges, such as Grand Canyon University’s conversion to nonprofit status. The University of Phoenix is also seeking to drop its for-profit status through an acquisition by the state of Idaho, facing scrutiny from regulators.

These regulatory overreaches harm students and limit program options, with private-sector players urged to resist and protect themselves from being targeted. Michael Brickman, an adjunct fellow at the American Enterprise Institute, emphasizes the need for companies to fight back against regulatory overreach to ensure fair treatment and innovation in higher education.