WASHINGTON – For-profit colleges put revenues above education, and charge students high tuition and loan rates that could leave them in debt for years, a Senate Democratic report said Monday.
While students are aggressively recruited, they drop out in high numbers without the degree or certificate initially sought, the report said. It found that 54 percent of students enrolled in 2008-2009 left without a degree or certificate by mid-2010. When two-year associate degree programs were studied, 63 percent left without a degree.
The staff report was issued by Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee.
The report said veterans were among those vulnerable to the tactics by for-profit schools, since these colleges receive the largest share of military educational benefit programs. Eight of the top 10 recipients of GI bill money since the Sept. 11, 2001, attacks went to for-profit education companies.
The report said reaching an enrollment quota was found to be the highest priority for recruiters. Publicly traded companies operating these schools had an average profit margin of 19.7 percent. They paid an average of $7.3 million in 2009 to top executives, while the five highest paid leaders of large public universities averaged $1 million and leaders at nonprofit colleges averaged $3 million.
Steve Gunderson, president and chief executive officer of the Association of Private Sector Colleges and Universities, dismissed the report as inaccurate.
“Unfortunately, Sen. Harkin’s report continues in the tradition of ideology overriding reality,” said Gunderson, a former Republican congressman from Wisconsin. “The report twists the facts to fit a narrative, proving that this is nothing more than continued political attacks on private sector colleges and universities.”
