Lawmakers Call for Inquiry on GAO Report on For-profit Colleges

Six members of the U.S. Congress asked the Government Accountability Office to reexamine a report that 15 for-profit colleges misled undercover investigators about costs and job-placement records.

On Nov. 30, a revised version of a report first released on Aug. 4 included changes that suggest the GAO, Congress’s investigative arm, didn’t meet "its own high standards" of "thorough analysis and fact-checking," according to a letter the lawmakers sent yesterday to Gene L. Dodaro, the acting U.S. comptroller general, in Washington.

"Our interest in this matter is ensuring that GAO adheres to its mandate," the legislators said in the letter.

The signers were Republicans John Kline of Minnesota, Darrell Issa of California, Brett Guthrie of Kentucky and Glenn Thompson of Pennsylvania, and Democrats Alcee Hastings of Florida and Carolyn McCarthy of New York.

Brian Newell, an aide on the House education committee and a spokesman for Kline, confirmed the letter’s contents in a telephone interview yesterday. The GAO received the letter and plans to provide Congress with the information requested, Chuck Young, a spokesman for the agency, said in an e-mail.

An index of 13 for-profit education stocks has fallen 27 percent this year because of concern that increases in regulation of the industry will slow colleges’ enrollment growth.

In the original report, the GAO said a college representative told an undercover investigator that graduates are making $120,000 to $130,000 a year. In the revised report, the GAO said the official also told the investigator that, in the economy at that time, a graduate could expect pay starting at $13 to $15 an hour “if the applicant was lucky.”

In the Nov. 30 report, the GAO said a representative at a for-profit college told a investigator posing as an applicant that she “could” take out the maximum amount of federal loans, even if she didn’t need the money, and place it in a savings account. The earlier draft used the word “should.”

Tom Harkin, the Iowa Democrat who heads the Senate education committee, called the revisions “minor” in a Dec. 17 statement, and said the report’s conclusions “remain unchanged.”

BLOOMBERG BUSINESSWEEK