A Long Overdue Examination of For-Profit Higher Education

Today, the U.S. Senate Committee on Health, Education, Labor and Pensions held the first in what promises to be a series of hearings examining allegations of fraud, waste, and abuse in the for-profit higher education sector. In a written statement, Sen. Tom Harkin, the Iowa Democrat in charge of the committee, said the purpose of the hearings would be to ensure that “for-profit colleges are working well to meet the needs of students and not just shareholders.”

At Higher Ed Watch, we very much welcome these hearings, as they are long overdue.

In recent years, some of the largest publicly traded and privately-held for-profit higher education companies have come under intense scrutiny from federal and state regulators and have faced numerous lawsuits by former employees, shareholders, and students over allegations that they have engaged in misleading recruitment and admissions tactics to inflate their enrollment numbers (see here, here, and here). Some of these companies have been accused of deliberately recruiting and enrolling unqualified students and sticking them with huge amounts of debt for training from which these individuals are unlikely to benefit.

Yet, time and time again, federal policymakers have looked the other way, and, in fact, have made it even easier for unscrupulous schools to take advantage of vulnerable students and taxpayers. When the Republicans controlled both the White House and Congress, they willfully ignored these allegations and championed these schools. But they are not the only ones to blame.

After all, it was a Democratic-led Congress that approved legislation in 2008 that significantly weakened a key consumer protection provision, known as the 90-10 rule, that aims to ensure that for-profit colleges receive at least a limited share of their revenues from sources other than federal student aid. In fact, only last summer, the House Committee on Education and Labor, under the leadership of Rep. George Miller (D-CA), overwhelmingly approved an amendment to its version of the student loan reform legislation that would have further gutted this important provision. Thankfully, this proposal didn’t make it into the final bill, and Representative Miller has recently taken a more critical stance.

Predictably, for-profit college lobbyists and leaders have already started portraying these hearings as a witch hunt. But in reality, it’s a much-needed and long-overdue examination of an industry that all too often puts the interests of shareholders above the students they are supposed to be serving.

In the weeks and months ahead, we will report on the substance of these hearings, and continue our longstanding work in this area. But for now, we want to give credit to Senator Harkin for promising to provide the type of oversight that has for too long been sorely lacking.

To read all of our past coverage on for-profit higher education, click here.