Journalism in the Public Interest

House Passes Amendment to Block Funding of Oversight Measure for For-Profit Schools

Representatives who sponsored the amendment also received campaign contributions from the career college industry.

The House today passed an amendment that could curtail the Department of Education’s attempts to regulate for-profit colleges.

The amendment is aimed at a proposed Education Department rule that could bar schools from accessing federal student aid if too many students can’t repay their loans. That regulation—called the “gainful employment” rule—has not yet been finalized and was at the center of a hard-fought PR and lobbying war last year between the for-profit industry and consumer and student advocates.

The amendment, which passed 289-to-136, blocks the department from using any money in the latest spending bill to implement the rule.

Some advocacy groups have opposed the rule, claiming that it unfairly affects schools that serve greater numbers of poor and minority students and will deprive those students of the full range of educational opportunities available to more affluent, traditional college students.

But many advocacy groups support tightening restrictions on the for-profit college sector, which they say has used questionable recruiting tactics, and left students with crushing debt and dim job prospects. In a letter to President Obama, nearly 50 civil rights, consumer and student advocacy groups urged the administration to adopt the rule, which they said would “eliminate waste, fraud and abuse” by education programs that “consistently leave students buried in debt they cannot repay.”

Despite today’s passage of the amendment in the House, student advocates said they did not believe it would pass the Senate.

Last summer, we pointed out that many of the lawmakers who joined the for-profits in their fight against the rule had also received large amounts of campaign cash from the industry and its lobbyists.

So, we took a look to see whether the four lead sponsors of this amendment had also received donations from the industry—and they have.

Rep. John Kline, R-Minn., the lead sponsor of the bill, is the chairman of the House Committee on Education and the Workforce. He received at least $33,600 in contributions in the last two years from for-profit schools, or their employees, according to an analysis we did of campaign finance records.

Rep. Virginia Foxx, R-N.C., who chairs the subcommittee on Higher Education, took in at least $2,750.

A spokesman for Congressman Kline denied that contributions had played any part in the chairman’s support for the amendment. “The department’s regulation will deny access to the millions of students who need the flexible job training and higher education options proprietary institutions provide,” said Brian Newell, in an e-mail to ProPublica. That concern is echoed by the industry’s lobby group, the Association of Private Sector Colleges and Universities, which was one of the main contributors to the sponsors of the amendment. Congresswoman Foxx also denied that contributions were a factor in her opposition to the new rule.

Two Democrats who co-sponsored the amendment also received campaign contributions. Rep. Alcee Hastings, D-Fla., who has written to the Education Department opposing the rule, received at least $8,900 in the 2009-2010 reporting period. And Rep. Carolyn McCarthy, D-N.Y., received at least $55,350 from the career college industry, according to the filings.

During the debate over the amendment, Congressman Hastings said that the department’s rule was overbroad and would be burdensome to implement. Hastings also said it would lead to school closures and would deprive many Americans of attending the schools of their choice. A spokesman for Congresswoman McCarthy said she has a long-standing commitment to career schools and believes that the schools can help their graduates.

Lauren Asher, president of the Institute for College Access and Success, a research and advocacy group that has criticized for-profit schools, said the amendment runs contrary to the goal of increasing accountability and reducing waste.

“Especially when there's so much concern, as there should be, that tax dollars are being spent carefully, it's frankly astonishing that there'd be an attempt to prevent the monitoring and oversight of billions of dollars of state funds,” she said.

What do anyone think a bought & paid for congress would do otherwise? They should be stung under the Rico act.

Uhhhh how do you spell Union Busting?  Is there a for profit Teachers Union - i don’t think so.
  Tax payers should not and cannot pay for any part of Privatized Education. i think they can apply for repayable grants and loans but not one dime for any part of Privatized Education be it charter or whatever.
  Public Education should be up-graded constantly but tools of the Education Capitalists have seen to it that Public Education is vaporized.
  Rupert Murdock said in a large meeting just a month or so ago..there’s $$$500 Million dollars to be had in Privatized Education.
  There’s Not a Repug alive that entertains the thought of Oversight or Accountability. They simply have no scruples or integrity.

Just pointing out…the two democrat co-sponsors received more contributions from the private education lobby than the two republican sponsors mentioned in this article.  why does it always degenerate into a dirty republican scheme.  there are good attributes of private education and there may be problems that require oversight.  if the bloated federal budget can’t sustain funding for the oversight then the people using private institutions had better start reading the fine print.  no one can be guaranteed a job in this economy whether their education is private or public.  to believe otherwise is just plain nuts. this has absolutely nothing to do with union busting. However, personally,  if I had to choose whether my tax money went toward union pensions and viagra vs. private education which at least has a profit motive to constrain it, I would prefer that my taxes went to private education…BUT if I really had a choice I would prefer to fund neither at the federal level.

It shouldn’t surprise anyone that the corrupt, bought-and-paid-for Congress would attempt this. Itisn’t a Republican or Democrat issue—both parties are full of crooks. Regulation of these schools is a legitimate and necessary government function when student loans are involved. They should be regulated whether or not they are “for-profit.”

Why am I not surprised that as we get closer to this bill becoming a law, more of our government officials are going to jump off the platform of good old fashioned honesty, to help the for-profit schools.  I worked in the industry for 24 yrs.  We helped thousands of lower income people change thier lives without lying.  We were always able to do the right thing for the student.  My favorite thing, doing the right thing for the student.  Then, after 19 yrs of working for a small mom and pop school, the owner sold this well established forprofit school to a CORPORATION.  They hired people who came up with lies and ways to munipulate students that I had never dreamed of, and of course wouldn’t do.  With each new hire I was continually flabergasted by the things they would come up with to “get the student”.  “Get that number”.  To my understanding, the corporation that bought us and by the way had never even been in the school business, had one thought in mind, to go public in 5 years.  Make the big killing and get out.  No matter what the price to the student, the emotions or integrity of the admissions reps, (oh are we thought of as slime), the other departments in the school ie instructors, career services employees financial aid people, all the way down to the staff cleaning the school.  The school had been there for over 50 yrs and had a fine reputation, for a propriatary school.  I was proud to say I worked there.  Then came the corporation with its American Dream.  How sad!!!!!  Integrity walked out the door. The lying, cheating, insighting fear in all current employees still makes my stomach churn.  Many many people were hired with no scrupples, one DOA was hired who had a known drug addiction, the next DOA ahd worked for a Corporation that has been sued many, many times, and at that I have to stop myself.  I have never felt strong enough to be a corprate type of person, nor smart enough to play the games that go on in large corparation.  I lasted 5 years and was fired.  But, every time they told me to do something, I remember thinking and then, always just saying “You can’t do that to people.  Looks like I’ve run out of room before I got to make my point.

I am not aware of any federal tax funds being spent on any union pensions. Medicare does not pay for Viagra so where are tax funds being spent?

The reason we have public education today is due to the inequalities of education in the Eighteenth Century. Do you feel an American should not be afforded the same education as any other American?

An effort by our great Nation to provide an education to those without means and compete with those that have means should never be forgotten or overlooked. I for one am not interested in the separatist platform of have and have nots of an unfunded or unregulated education system for our citizenry. Intellect is the key not capitalism.

We should remind ourselves that an uneducated American is for more cost intensive than an educated American.

If you want to draw a comparison based on campaign contributions then be fair.  Picking and choosing information and drawing illogical conclusions based on a small sample is just not scientiific or fair.  Especially when campaign contributions run the political machine for all industries.

I work in the industry as an Adviser to mostly for profit schools. Here’s my take on the issue. All schools where government loans are involved should be regulated. We are hired by schools to mystery shop themselves to ensure compliant behavior and quality service levels. I’d argue, what one might call selling another might simply call excellent service. As long as people don’t lie.

Here’s the flip side of the conversation, prospective students who move into the publicly funded admissions/registrar/counseling stream are abused due to benign neglect. Potential students walk away from the process totally dejected, human potential wasted…The mystery shop scores for public schools is generally abysmal.

Whats worse, being too aggressive or not aggressive enough…?

Peter Buscemi

Feb. 21, 2011, 3:02 p.m.

How about instead of a public education ending at senior year in high school, it ends at a Bachelor’s degree? With millions of students ready for the workforce and paying taxes to help with the added cost of four more years of education, we can get rid of for-profit higher education? For-profit higher education won’t like that proposal, I wonder how much they would spend on lobbyists to prevent that?

Public education fails high schools students in the inner cities.  Just look at the statistics….....If it fails in high school, how do you expect it to do better at a college level?
Let’s really level the playing ground and determine just what the graduation rate and placement rates are for colleges and universities.  You may be in for a gigantic shock!  No one really knows.  Incidentally, let’s make sure a graduate is a graduate and that the placement rate is based on the number of real graduates not the number that can be contacted or reached.

One reason 4 year colleges & universities are better institutes of learning is because adjunct instructors have to have a Master’s degree, and professors have PhDs, so the students get a more thorough education. More people would enter the teaching profession at these levels because of demand and for personal accomplishment, and maybe for some perks, too. High school students who don’t think they could graduate from college would get better prapared by high school classes to go directly into college, and they wouldn’t get the hopeless feeling that their education is leaving them at the bottom of the workforce, after graduating high school. We need a big change in education so that students have proof that they’re believed in. Politicians who talk about a better competing America with the rest of the world and spreading our resources to effect change would have a dream situation, and Diane’s comment above, which was scary, would resonate as a wake-up call to the masses who didn’t know this was going on.

9/10 high school seniors want to go to college 1/10 actually do. Do the other 90% work at McDonalds?

4 and 6 year programs are great to teach people how to think and in many cases launch a career at a senior level. but you don’t need to goto to school for 4 years to fill most of the middle class jobs in America.

Using business school as an example many faculty with advanced degrees teaching kids how to succeed in business would mess the bed if they had to meet payroll in tough economic times. Many faculty at public schools get seduced by tenure. Many of my pals with advanced degrees readily admit they were simply adept at assimilating and regurgitating information.

over 50% of those pursuing a four year program, private ‘or’ public do not graduate.

I agree with Gregg.  After all is said and done, presidents of the forprofit schools all say they are trying to counsel their admissions directors to stop ALL the harassment to prospective student, stop the unscrupulous tactics, stop pushing for numbers, stop overselling, stop stop, stop.  They are doing that because of gainful employment and they are using government funding.  What about some kind of regulation of the prices of these schools I’ve watched to go up and up and up.  A proprietarty school cannot compare itself to a Wright State or UD or Harvard, but the corporations seem to think they can raise the tuition cost with a thought to what the student can earn and how much in student loans they will have to borrow.  The proprietary industry does provide a service to those that want what they offer (ie hours of school, not having to take a lot of gen eds, and the hope it will get them employeed quicker.  And the employees need their jobs.  Even looking at the worst of the strong arm executives, directors and admin. managers they are just humans trying to keep their jobs.  I get it. But!!

How do you get the government to see what has happened to the cost of these schools?  Corporations have themselve a diamond in the rough.  All they have to do is push and they can get rich.  Somehow they have to be tempered.  Gainful employment will not stop thousand of people from being able to get education.  What it should be doing is stopping the unscropulous dealing and almost atomic pressure to get a student.  Somehow find the middle of the road between Ponsi scheme and doing the right thing. I know that’s just a Pollyanna answer.

Corps that are publicly traded or wanting to go that route are hamstrung as they as a business need to follow DOE/Accrediting body regs and they also must follow SEC laws. The obligation of a public company/corporation is to within the law, maximize shareholder value. If they don’t they expose themselves legally. The corps are just working to the rules they’ve been given because they have to..The rules get tightened , the corps will adjust….

So maybe private schools must be held by a maximum number of shareholders, not trade publicly?

So giving student loans, backed by the taxpayers, to people who can’t afford college or pay back the loans is a good thing since it provides the “opportunity” for education?
This is about the same as advocating giving subprime mortgages, backed by the taxpayers, to people who can’t afford to buy a house, and later default.
We see where that got us.

independent thinker

March 7, 2011, 4:53 p.m.

The Department of Education should be abolished, and bozObama is trying to extend their nymphomaniacal-spending spread?

Angelika Hurtado

March 14, 2011, 4:47 p.m.

I would be very interested to hear Pro-publica’s findings on Non-profit distance learning schools.  One in particular, Excelsior College in NY has very cozy access to military personnel around the world, and while maintaining accreditation for its School of Nursing, has an abysmal graduation rate.  The ‘final’ is a 3 day practicum that has about a 25% pass rate, but the strategies the school uses to wind a student in, convince them to purchase seminars and workshops, and collect testing fees are identical to the for profit industry.  Yet they still have several states that will not acknowledge them for state licensure at the RN level.  For those that do finally pass, it is usually at the 2d or 3rd attempt, racking up and additional $10,000 above and beyond the basic tuition and testing fees for non-traditional learning.  The secrecy surrounding the process is disguised as being for the benefit of the students, but during my test experience, I met hotel staff (at the college’s recommended hotel) that had been made to sign confidentiality agreements so that future test takers would not be told about the failure rate before they tested.  God forbid they figure out the profit architecture.  I wish I had.  The test cycle that I participated in had 6 students, and all 6 failed.  I know that I was federally funded as a VA student, but many of the others had saved and borrowed and skimped on lunch, or worked overtime to just get there.  The other big indicator should have been a red light from the git-go.  The theory exams, all available at around $300 per test, can be completed in a few weeks.  I did 9 in 7 months, the equivilence of 20 credit hours, so it should have set off lights and buzzers. I do admit my culpability in this experience.  I substitued my due diligence by the fact that it was heavily endorsed by the Army Medical Corp, and I do actually know a few people that have passed it.  Fooled me once, shame on you.  I won’t fall for it again.  But it continues.  The college boasts over 40,000 students globally.  Has there been any research or investigation of Exclesior College and its very profitable ‘non-profit’ strategy or its ties to the US Military and the Corp of Nurses?

This article is part of an ongoing investigation:

For-Profit Schools

For-profit colleges are under fire for their recruiting practices, and the graduation and loan default rates of their students.

Get Updates

Our Hottest Stories