The Senate Scrutiny Begins

Senate Democrats began their investigation of for-profit higher education here in earnest Thursday, holding the first in what they promise will be a series of hearings aimed at better understanding the sector’s value to students and taxpayers.

For three hours, the Health, Education, Labor and Pensions Committee heard testimony that, taken together, amounted to a largely scathing overview of the sector.

A former student spoke of being pressured into a vocational program that led her to debt and unemployment. The U.S. Department of Education’s inspector general and a former California prosecutor recounted instances of fraud. An investor who made billions of dollars taking advantage of the subprime mortgage crisis asserted that for-profit higher education is on its way to being the next big debt crisis.

And that picture, of an industry rife with misuse of federal funds, was just what the committee chair, Sen. Tom Harkin (D-Iowa), wanted. “We have a responsibility to ensure the taxpayer dollars are being spent wisely and that for-profit colleges are serving students, not just the shareholders,” Harkin said at the start of the hearing, which was based in part on the findings of a report he released Thursday synthesizing available data on the sector. Federal financial aid provides students an opportunity to receive postsecondary education, he added, and “Congress has a responsibility to ensure that this opportunity is real, and not just false hopes peddled on a billboard or pop-up ad.”

After a decade of little oversight of for-profit higher education that coincided with dramatic growth in enrollments and revenues derived from federal financial aid funding, Democrats in Congress and the Obama administration have begun tightening their grip on the sector. Its institutions enroll about 10 percent of the nation’s postsecondary students but receive nearly a quarter of the funds dedicated to student aid under Title IV of the Higher Education Act of 1965.

While the U.S. Department of Education has thus far focused on revising regulations related to the integrity of the Title IV programs, and have gone out of their way to say they are not singling out private sector institutions (protestations not always believed by representatives of the colleges themselves), congressional Democrats appear primed for a wider-reaching examination of the sector. “These are for-profit schools, but 90 percent of their money comes from taxpayers,” Harkin said. “There’s something happening out there that compels us to look at this.”

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