Cui Bono?

Congressional Spotlight on

For Profit Higher Ed

“Education is too important for the future of this country,” he [Tom Harkin] said. “Facing the budget problems we have in the next 10 years, we just can't permit more and more of the taxpayers' dollars that are supposed to go for education and quality education … to be going to pay shareholders or private investors.”

From Inside Higher Ed

At a hearing on the “student recruitment experience” at for-profit colleges that began Wednesday morning and carried on through the mid-afternoon, Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, outlined plans to hold more hearings on the sector, to collect broad sets of information from for-profit colleges, and to begin drafting legislation aimed at cleaning up the sector.

Much of Harkin’s motivation came from the findings of a Government Accountability Office “secret shopper” investigation of recruiting practices at 15 for-profit campuses, the results of which...were officially released at the start of the hearing. The probe identified “fraudulent, deceptive or otherwise questionable marketing practices” at all 15 institutions, and inducements to commit fraud on the Free Application for Federal Student Aid at four institutions. Coupled with a former recruiter’s account of his experience on the job, the evidence presented at the hearing depicted an industry aggressively and universally going after “leads” and “starts” with the institutional objective of securing federal financial aid dollars.

"GAO's findings make it disturbingly clear that abuses in for-profit recruiting are not limited to a few rogue recruiters or even a few schools with lax oversight,” Harkin said. The evidence was collected from some of the nation's largest for-profit colleges, including the University of Phoenix and Kaplan College.

Sen. Johnny Isakson (R-Ga.), reinforcing what has become Republicans’ standard way of addressing problems uncovered at for-profit colleges, said: “I know we’ve got people doing bad things, but I know we’ve got a lot of people doing it right and they’re going to be under a cloud unless we begin to separate the wheat from the chaff.”

Joshua Pruyn, a former recruiter for a Westwood College, who testified at the hearing, said he didn’t think the kind of dishonest behavior that he saw and was encouraged to emulate while working at a Colorado campus resulted from a few “rogue” employees violating his institution’s code of ethics, but rather a pattern of behavior encouraged by corporate leaders.

Harkin, too, said he believed the encouragement to aggressively and dishonestly pursue students came from higher up. Showing a recruitment training PowerPoint slide from the University of Phoenix with the header “Creating Urgency: Getting Them to Apply NOW."

Harkin said he thought inducements to recruit aggressively were coming from company executives. “That doesn’t come from some employee,” he said. “That comes from the top.”

The fallout from the hearing isn’t likely to be positive for the for-profits.

The stocks of most publicly traded for-profits, including those visited by GAO investigators, closed down for the day on Wednesday afternoon.

Indeed...