Senate Scrutiny, Round 3

WASHINGTON — The increasing divisiveness of the debate over the federal government’s role in the oversight of for-profit colleges (and the growing likelihood that nonprofit higher education will get roped into the scuffle) was on full display Thursday as a Senate committee convened for its third hearing examining the sector.

Framing his concerns about the sector’s $24 billion stake in the federal financial aid program and what he called "misleading, deceptive, overly aggressive or fraudulent" practices that lead students to enroll at for-profit colleges, Senator Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, singled out the institutions for scrutiny. "They figured out how to be profitable even when the students are not successful," he said. "There’s irrefutable evidence now that something’s gone wrong with this industry. I’m not saying that everybody’s bad in the industry, I’m just saying that the system has gone wrong."

Harkin reiterated his pledge to sponsor legislation relating to for-profit colleges early next year. But he conceded the need for further investigation and more hearings, because “I don’t know exactly what needs to be done.” He also announced that the next hearing on the sector would be in early December and focus in part on the increasing share of funding going to for-profit colleges from the tuition assistance programs for veterans, active duty military and their families.

At the start of the hearing – which was devoid of the startling revelations that some in the sector and investors had feared — Harkin unveiled a report analyzing some of the data submitted to the committee by 30 for-profit colleges as part of his staff’s investigation of the sector. The report focuses entirely on the for-profit sector and does not include data on nonprofit colleges and universities as a basis for comparison.

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