The Washington Post Comes Clean

In the annals of small victories, this may be among the smallest. But that won’t stop us from bringing it up.

Nearly a month after we took The Washington Post to task for failing to disclose its ownership stake in the for-profit higher education company Corinthian Colleges, the newspaper finally did. In an article on a rally that for-profit colleges held on Capitol Hill yesterday, the Post acknowledged that it “owns more than 8 percent of the stock of Corinthian Colleges, which has about 110,000 students.”

At Higher Ed Watch, we would like to applaud the Post for coming clean. In recent months, the newspaper has come under much-deserved criticism for lobbying on both its news and editorial pages against regulations the Obama administration has proposed that would penalize for-profit colleges for saddling students with unmanageable levels of debt. Post executives and editors have defended themselves by saying that the newspaper has been fully up-front about its ties to Kaplan Inc., one of the largest publicly-traded chains of for-profit colleges in the country. Considering that Kaplan accounts for about 60 percent of the newspaper company’s total revenue, we don’t see how they had any other choice.

But in reality, the newspaper has not been completely transparent. Time and again, it has failed to mention the substantial stake it has in Corinthian Colleges, a giant for-profit higher education company that doesn’t exactly have a stellar reputation, even among those within the industry. By most accounts, Corinthian appears to be one of the companies most in jeopardy if the administration moves forward with its proposed “Gainful Employment” regulations because of the substantial amount of debt its students take on and their poor record of paying it back.

According to data released by the Education Department this summer, only 24 percent of students who left Corinthian schools in the last four years had paid down any principal on their federal student loans as of September 2009. In other words, about three quarters of students who left these institutions during this period of time has not paid enough to reduce their total loan debt by even a dollar. Under the administration’s proposed rule, for profit vocational programs with repayment rates under 35 percent could be in serious danger of having their eligibility for federal student aid revoked.

Of all of Corinthian’s former students, those who attended the company’s Everest College campuses had the most trouble handling their debt. According to the Department, 33 of the company’s 86 Everest locations had repayment rates of less than 20 percent and five had rates below 10 percent. The Everest Institute in Detroit, for example, had a rate of just 7 percent.

At first, it didn’t appear that our reporting had done any good. In fact, just last week, the Post’s higher education blog College Inc. published a piece on the multi-million dollar advertising campaign that Corinthian Colleges has launched against the Education Department’s Gainful Employment regulations — without once mentioning the newspaper’s ties to the company. It was an incredibly stunning lapse for a newspaper that has won praise from its ombudsman, of all people, for “its commitment to disclose self-interest.”

We are happy to see that the Post apparently has had a change of heart. Of course, we think that the newspaper should go much further – and stop running editorials or commentary on issues related to the for-profit higher education industry. The newspaper has too big of a conflict of interest to provide an untainted view of the issues to its readers. But we won’t hold our breath.

So yes, it’s a very limited victory, but a victory nonetheless.