The problem is that the government allowed the problem to persist for too long before acting. If the government wants to be in the business of approving schools (even if it's only indirectly) it should hold schools to a lot higher standards and move a lot quicker when results start to slip.
For better or worse when people see "Approved by The US Department of Education" they have (perhaps unreasonable) expectations that that means something.
I think it's important to distinguish that the government should not be directly approving of universities. Instead they should approve professional accreditation organizations that manage their own standards (which is what they do). In no circumstances do we want elected politicians to be legislating what goes into a university degree.
The Department of Education just needs to give a little bit less leeway to low quality accreditors. (and even then, the decisions should be made by career bureaucrats led by an appointed secretary, not by legislation)
Its actually pretty common for legit training programs with decent acredation to get bought out by these shady operators and then run the school at lower standards.
I once looked at art Institute and each campus location varied greatly in accreditation.
