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Senate Releases Critical Report of For-Profit Colleges

After a two-year investigation of for-profit colleges, a Senate committee released a report Sunday critical of the sector's practices, described as often putting business concerns above students' interests.

The 800-page report, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success, compiled by the Senate Committee on Health, Education, Labor, and Pensions, looked at 30 for-profit higher education companies.

The report said that in theory for-profit colleges should be well-equipped to meet the needs of nontraditional students with the convenient locations, online classes, and flexible class schedules. Yet these schools enroll students with modest financial resources who must pay high tuition and take out significant student loan debt. Too often, students quit and are left with loans to repay, though not the degree or certificate needed to get a higher-paying job.

The report said that many for-profit colleges fail to make the necessary investments in student support services to help students succeed. For instance, in 2010, the for-profit colleges examined employed 35,202 recruiters compared with 3,512 career services staff and 12,452 support services staff. Colleges spent 23 percent of their revenue on marketing and recruiting and 17 percent on instruction.

The Senate committee concluded that Congress failed to counterbalance investor demands for increased financial returns with requirements that hold companies accountable to taxpayers for providing quality education, support, and outcomes. Federal law and regulations currently do not align the incentives of for-profit colleges so that the colleges succeed financially when students succeed, the report said.

The Association of Private Sector Colleges and Universities, which represents the for-profit sector, issued a statement in response to the Senate Committee's report. "Unfortunately, Senator Harkin's report continues in the tradition of ideology overriding reality," according to the statement by Steve Gunderson, president and chief executive officer of the association. "The report twists the facts to fit a narrative, proving that this is nothing more than continued political attacks on private sector colleges and universities."

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