For-Profit College Swindle: Sen. Tom Harkin Revisits Long-Standing Complaints
We weren't the only ones to post criticism of for-profit colleges this week (see the news item: "For-Profit Colleges Cheat Students and Get Away With It").
U.S. Sen. Tom Harkin has released a scathing report that criticizes the for-profit education industry, echoing many complaints that surfaced in an undercover investigation by the Government Accountability Office two years ago. Insiders say that few of the problems, like deceptive sales tactics and expensive tuitions, have been fixed.
The underlying problem? The feds have been unwilling to stanch the flow of taxpayer money and loans to schools that offer little educational value.
Now Harkin has added fuel to the fire, reports the New York Times:
"In this report, you will find overwhelming documentation of exorbitant tuition, aggressive recruiting practices, abysmal student outcomes, taxpayer dollars spent on marketing and pocketed as profit, and regulatory evasion and manipulation," Mr. Harkin, an Iowa Democrat who is chairman of the Senate Health, Education, Labor and Pensions Committee, said in a statement on Sunday. "These practices are not the exception -- they are the norm. They are systemic throughout the industry, with very few individual exceptions."
From our news story:
One key to the business is student aid. To these schools, every American is worth around $117,000. That's the total amount each person is eligible for in government financial aid. Under federal regulations, for-profit schools are required to collect 10 percent of all tuition in cash; the rest can be financial aid. The industry makes roughly $30 billion a year off American taxpayers under this arrangement.
Some legislators like Harkin and Sen. Dick Durbin have attempted to rein in the flow of cash but have been met by opposition from most of Congress. As recently as last month, the Department of Education was set to implement new rules that would cut off funding to schools whose students were struggling most to repay their loans and couldn't find a job. At the last minute, a Washington, D.C., federal court judge blocked the rules. He said the criteria were too arbitrary.
The GAO report to Congress came out two years ago this week. A managing director with the GAO told New Times he can't think of any legislation that's been enacted as a result, save the stymied Department of Education rules mentioned above.
Meanwhile, people with contact to current employees of some schools say the profit motive still drives the whole operation, sending poor students into classes they might not need.
As we discussed, the Florida Attorney General's Office still has four open investigations into for-profit colleges in the state, many with campuses in Broward and Palm Beach counties. They've settled one, with dubious benefits for former students. Read the full story here.
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