The Wonk Room: Incoming Education Chairman On Regulating Higher Education Profiteers: ‘I Don’t Think So’

The Wonk Room

December 13, 2010
By Pat Garofalo

Incoming Education Chairman On Regulating Higher Education Profiteers: ‘I Don’t Think So’
One of the Obama administration’s higher education initiatives has been to take a hard look at for-profit colleges like Strayer University and the University of Phoenix. This scrutiny is well-founded, as for-profit colleges are taking in a growing number of students and an ever increasing amount of federal student aid, while also accounting for a disproportionate amount of student loan defaults.

Sen. Tom Harkin (D-IA) — who chairs the Senate Education Committee — has said that he is going to try and implement stricter regulations against these schools. But the incoming GOP chairman of the House Education and Labor Committee, Rep. John Kline (R-MN), told Reuters that “he would oppose such an effort”:

“I would push back really hard against a bill that might come out of Chairman Harkin’s committee.” Asked if such a bill could succeed, Kline said: “I don’t think so.”

For a sense of what kind of an industry Kline is protecting, consider that, currently, “eleven percent of all higher-education students are enrolled in for-profits, but they receive 26 percent of federal student loans and account for 43 percent of defaulters.” The graduation rate for first-time, full-time candidates at for-profit colleges is 22 percent; it’s 55 percent at state colleges and 65 percent at private non-profit universities.

As McClatchy reported, for-profit schools have been accused of “recruiting students with inflated promises, fudging financial-aid applications and leaving graduates with crushing debt and bleak job prospects.” According to the Pew Research Center, “one-quarter (24%) of 2008 bachelor’s degree graduates at for-profit schools borrowed more than $40,000, compared with 5% of graduates at public institutions and 14% at not-for-profit schools.”

Not only are some for-profit colleges leaving students crippled with debt and unemployed, but they’re doing it while lining their executives’ pockets with taxpayer dollars. Harkin put together a report finding that for-profit colleges even scammed $521 million from the U.S. taxpayer “by recruiting armed-services members and veterans through misleading marketing.”

For the record, before he’s even picked up the Education and Labor Committee gavel, Kline has expressed a desire to deny unemployed workers jobless benefits, punt on new mine safety regulations, and cut student loans. Ignoring abuses in the for-profit college industry would just be icing on the cake.UPDATE

At College Guide, Daniel Luzer notes that Kline "was a little unclear on what he thought was wrong with regulations that would limit the ability of for-profit colleges to take advantage of federal financial aid if they saddle their students with too much debt.

Pat Garofalo is the Economic Policy Editor at American Progress

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