Durbin Joins Lawmakers in Calling for Government Review of For-Profit Colleges

[WASHINGTON, D.C.] – In light of recent press reports raising concerns about the for-profit education sector U.S. Senator Richard Durbin (D-IL) today joined other lawmakers in calling for a review of for-profit or “proprietary” institutions of higher education.  Specifically, they asked the U.S. Government Accountability Office (GAO) to assess the quality of for-profit institutions, as well as how much of their revenue is comprised of Federal student aid and other Federal funding sources.

“Millions of dollars are being sent to for-profit schools every year through federal student aid programs,” said Durbin.  “It is essential that these institutions are held a high academic standard in order to ensure that students are given access to a high quality education.”

Lawmakers signing on to today’s letter include Representative George Miller (D-CA), chair of the House Education and Labor Committee, Senator Tom Harkin (D-IA), chair of the Senate Health, Education, Labor and Pensions Committee and Representatives Timothy Bishop (D-NY) and Ruben Hinojosa (D-TX).

Currently, for-profit colleges account for less than ten percent of total higher education enrollment but account for approximately 25 percent of all Federal student aid disbursements.

The study will focus on the rapid growth of this industry over the last few years, the reported aggressive recruitment of students, increased variety in the delivery methods used to provide education to students and the quality and value of education provided.  Many for-profit colleges play a valuable role in post-secondary education, but taxpayers and students must have confidence that these programs consistently provide high-quality education opportunities.
The full text of the letter appears below:

Gene L. Dodaro
Acting Comptroller General
U.S. Government Accountability Office

Dear Mr. Dodaro:

We write to request that the Government Accountability Office (GAO) conduct a review of the for-profit or “proprietary” postsecondary education sector and the sector’s share of revenue derived from Federal student aid funding. The federal investment in the proprietary sector is significant.  While this sector accounts for less than 10 percent of total enrollments, it accounts for roughly 25 percent of all Federal student aid disbursed.

Recent press reports have raised questions about the quality of proprietary institutions.  These questions stem from the rapid growth of this industry over the last few years, reported aggressive recruitment of students by such institutions, increased variety in the delivery methods used to provide education to students, and the value of the education provided by such institutions.

On March 30, 2010, President Obama signed the Health Care and Education Reconciliation Act into law.  That legislation expanded student aid opportunities for students, including an historic $36 billion investment in the Pell Grant program.  The increased availability of Federal student aid, coupled with the significant growth of the proprietary sector, raises the issue of whether current safeguards are sufficient to protect the best interests of students and ensure that the nation’s taxpayers are achieving the best possible return on their investment.

In conducting its review, we are particularly interested in GAO examining:
  • The growth and change in the postsecondary education sector over the last several years, including changes in the structure and governance of institutions, recruitment practices, and the type and delivery of educational programs provided;
  • What is known about the quality of educational programs offered by proprietary institutions and the outcomes for students attending such institutions, such as program completion rates, professional licensure rates, job placement rates, and student loan indebtedness;
  • Whether existing program integrity safeguards are sufficient to protect against waste, fraud and abuse in the Federal student aid programs; and
  • The extent to which proprietary institutions’ revenue is comprised of Federal student aid offered under Title IV of the Higher Education Act as well as other Federal funding sources.

Finally, based on your review, we request that you provide any recommendations you believe may be warranted.

Dick Durbin
U.S. Senator