Mounting Congressional Scrutiny of For-Profit Colleges

June 22, 2010

Five Congressional Democrats on Monday asked the U.S. Government Accountability Office to begin a study of for-profit higher education that would look at institutional quality and business practices. The request comes just days after a House of Representatives hearing on accreditation that included criticism on the sector, and on the same day that witnesses were announced for Thursday's Senate Health, Education, Labor and Pensions Committee hearing on the for-profits. (The group scheduled to testify has a decided slant against the sector. The witnesses are Kathleen Tighe, the U.S. Department of Education's inspector general; Steven Eisman, an investor who has warned that the sector is "as socially destructive and morally bankrupt as the subprime mortgage industry"; Yasmine Issa, a former student at the for-profit Sanford Brown Institute; Margaret Reiter, a former California deputy attorney general and consumer advocate; and Sharon Thomas Parrott, chief compliance officer at DeVry, Inc.)

The request for a GAO review came from the chairs of the House and Senate education committees -- Rep. George Miller of California and Sen. Tom Harkin of Iowa -- and three other influential members, Sen. Richard Durbin of Illinois and Reps. Timothy Bishop of New York and Ruben Hinojosa of Texas. Citing "recent press reports [that] have raised questions about the quality of proprietary institutions" in a letter to the GAO, the members requested information on the sector's recent growth, as well as data on program quality, student outcomes and the amount of corporate revenues that comes from the Title IV federal financial aid program and other government sources. They also asked for a consideration of whether the Education Department's regulations on Title IV program integrity (in the process of being revised) do enough to safeguard against waste and fraud.

Harris N. Miller, president of the Career College Association, the sector's largest lobbying group, said he welcomes the review. "We have every expectation that the GAO, using facts and figures, will provide a full and fair review." He also asked that the Education Department hold off on issuing final regulations aimed at ensuring integrity in federal financial aid programs: "Secretary Duncan has said repeatedly he wants to get the regulatory changes right, and waiting for the GAO to conduct its study is one way to further that goal."

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