Congress Mercilessly Wrist-Slaps For-Profit Colleges

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On Monday, Senator Tom Harkin (D-Iowa) released the much anticipated results of his investigation into for-profit colleges. The report notes the exponential growth of the industry, its misleading advertising practices, high-default rates of students, and the fact that “the average tuition for a for-profit school is about six times higher than a community college and twice as high as a 4-year public school.” However, the biggest news about this report is that it’s not really news at all.

To quote Harkin from an August 4, 2010 hearing, when his last report on the for-profit college industry was released, “...the evidence points to a problem that is systemic to the for-profit industry: a recruitment process specifically designed to do whatever it takes to drive up enrollment numbers, more often than not to the disadvantage of students.”

At that time, Harkin felt confident in predicting that Congress would soon pass “clearcut” legislation tackling the problem, and has since introduced legislation earlier this year. But today, the only thing that’s clearcut is how effective the for-profit education industry is at stonewalling.

The Obama administration and Congress do deserve credit for trying. During a visit to Fort Stewart in April, Obama signed an Executive Order to prevent unfair recruiting by for-profit colleges on military bases and increase transparency and awareness about the institutions, which often target veterans and their GI Bill eligibility. In June, the Obama administration gained a small victory when the Washington U.S. Court of Appeals upheld the Department of Education’s crackdown on bonuses for recruiters for for-profit colleges.

But those two victories ultimately came up short when a U.S. district court in Washington struck down new regulations a part of the gainful employment law introduced by the Department of Education that would have tied an institution’s ability to receive federal loan money to student performance. The court ruled that the new requirements were too vague to be enforceable.

Judicial interventions aside, it’s clear that another factor preventing a crackdown on for-profit colleges is the vast amount of money the industry pours into lobbying. According to the Center for Responsive Politics, the for-profit education industry spent a whopping $10,232,275 on lobbying in 2011. The Association of Private Sector Colleges/Universities, the membership organization which counts heavy-hitters DeVry and ITT Technical Institute amongst others as members, has spent $530,000 dollars on lobbying so far this year and spent $915,632 in 2011. The data also shows that the association quadrupled their lobbying efforts in 2010, the same year the administration began targeting the industry.

Their money-giving extends to electoral campaigning. In the current election cycle, the industry as a whole has dished out $515,872 dollars to Democrats and $793,653 to Republicans, with Minnesota Republican John Kline ($145,524) and presidential candidate Mitt Romney ($107,557) the top two recipients. The industry’s largesse isn’t a strictly partisan affair, however: In the last election cycle, four of the top five recipients were Democrats. It seems that the industry reversed the flow of its funding as soon as Obama proved eager to crackdown. (Though even that’s an exaggeration: Given Obama’s goal to have the U.S. have the highest percentage of college graduates in the world by 2020, it’s in the administration's interest to try to reform the industry, not shut it down.)

The buzz over the Harkin report is likely to linger for a few days. If the recent past is any indication, however, the industry has nothing to fear. In another two years, we can all expect another report saying exactly the same thing.

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