Are for-profit colleges taking low-income students to the cleaners or helping them improve their lives? That question found its way to a Senate hearing on Thursday, the third in a series investigating why so many for-profit students can't repay their federal loans.
Sen. Tom Harkin (D-IA), who heads the panel leading the hearings, says before he proposes any action, he wants to find out the truth about whether for-profit colleges are cheating students. But Thursday's hearing led many to believe that Harkin had already made up his mind.
Harkin led off the hearing with his own report documenting that students at private, for-profit students borrow too much money.
"Ninety-five percent of for-profit college students borrow to attend school compared to just 16 percent of community college students," Harkin said.
Harkin explained that students borrow most of that money from the federal government. Taxpayers should care because they take the hit if students can't pay. And Harkin says that for-profit students should care, because they may be borrowing to pay for programs they are unlikely to finish.
"That is 57 percent of students withdrawing within the first two years based on self-reported numbers by the institutions themselves. Now these students take with them thousands of dollars in student loan debt," Harkin said.
These hearings have given new urgency to regulations proposed by the Education Department to limit access to student loans for for-profit schools that leave their students hanging. Kathleen Bittel told the Senate Health and Education Committee that schools do deliberately mislead students about their job prospects. Bittel is currently on leave from Education Management Corp., which owns the for-profit Art Institutes. Bittel says she may not be able to return to her job because she's blowing the whistle.
"In fact, I stand to lose everything by coming here to see you today," Bittel said.
In written testimony, Bittel said Education Management employees had falsified employment reports. For example, she says students only needed to work for one day to be counted as employed for the company's self-reported statistics. Bittel says the government needs to keep these companies honest.
"Across-the-board criteria for just what constitutes a job placement needs to be developed and enforced so that these commonplace tricks to justify employment can no longer exist," Bittel says.
Education Management said it has tried to investigate Bittel's allegations but that she refused to cooperate. Most of the Republicans on the Senate Health and Education Committee did not hang around for much of the hearing. Harkin explained the Senate had adjourned on Wednesday, so members might have left town.
But the panel's ranking Republican, Mike Enzi of Wyoming, indicated the minority was in fact protesting what he said was a one-sided investigation. Why, Enzi asked, wasn't the committee investigating low graduation rates that plague many not-for-profit schools?
"If we want to make sure that students have access to high-quality college education and make higher education more affordable, why aren't we looking at these problems throughout higher education?" Enzi asked.
The Republicans who did show were at pains to say this hearing shows how eager Democrats are to interfere in this free market activity. Sen. Richard Burr (R-NC) said that if the Education Department limits access to federal loans, the next step might be telling returning veterans where they can study.
"No, you can only use that GI money where we say you can use it. You can't use it to go to the NASCAR two-year institution that teaches you to be a mechanic," Burr said.
Harkin indicated he was surprised to see this is becoming a partisan issue. The only real surprise out there will be how many schools really will close down, as they claim, if the Education Department goes ahead with its proposed crackdown.
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